Income and wage inequalities from automation. A European perspective

Abstract The literature on the automation-employment nexus has expanded significantly and rapidly over the last decade, highlighting both a contraction in employment, wages, and the labour share, as well as an increase in wage inequalities. Drawing on a large-scale analysis of all European (EU27 + UK) NUTS2 regions during the period 2011–2019, this paper re-examines these claims and highlights a decoupling between wage and income inequalities. This decoupling may be driven by reallocation effects across sectors and ripple effects that induce substantial downward pressure on wages.