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Differences in labour market outcomes between East and West Germany persist, 30 years after reunification. Using high-quality administrative data from Germany, this column documents that East German plants face a steeper size–wage curve than West German ones, invest less in marketing, remain smaller, and, on average, pay lower wages. A model with labour market monopsony,
Read later Audio version Summary: While AI may offer the “biggest wealth opportunity of our lifetime”, the big question is will that wealth be limited to the technically-savvy and well-educated? (PIxabay) Rising levels of systemic inequality are becoming an “insidious side-effect of our increasingly AI-powered society” due to changes in the nature of work, according to a recent article in the Harvard Business Review (HBR). The piece entitled ‘ Algorithms are making economic inequality worse’ puts forward a number of key arguments to make its case. It posits that a new digital div...