Cities as catalysts of wage inequalities from digitalisation

This paper studies the redistributive consequences of digitalisation, highlighting urbanisation economies as catalysts of wage inequalities. Digitalisation generates productivity and reinstatement effects, whose balance can vary across occupations and settlement type, increasing wage inequalities among occupational groups within regions. Occupation-specific ordinary least squares (OLS) regressions using cross-sectional data on Italian cities (NUTS3 regions) in the period 2012-2019 show low-skilled workers facing displacement and negative productivity effects, particularly in non-urban contexts. High-skilled workers in urban environments enjoy increased labour demand and wages. Consequently, urban areas experience sharper wage inequalities as digital technologies spread, concentrating wealth and amplifying disparities among occupational groups.

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Publication Details

Journal
Spatial Economic Analysis
Published
2025-08-12
DOI
https://doi.org/10.1080/17421772.2025.2533478
Citations
1
Primary Topic
Digital Economy and Work Transformation
Type
article
Field-Weighted Citation Impact
4.20
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article

Cities as catalysts of wage inequalities from digitalisation

Camilla Lenzi, Elisa Panzera, Roberta Capello
1 citations
Spatial Economic Analysis
Digital Economy and Work Transformation
4.20
article

Cities as catalysts of wage inequalities from digitalisation

Camilla Lenzi, Elisa Panzera, Roberta Capello
article en
1 citations

Abstract

This paper studies the redistributive consequences of digitalisation, highlighting urbanisation economies as catalysts of wage inequalities. Digitalisation generates productivity and reinstatement effects, whose balance can vary across occupations and settlement type, increasing wage inequalities among occupational groups within regions. Occupation-specific ordinary least squares (OLS) regressions using cross-sectional data on Italian cities (NUTS3 regions) in the period 2012-2019 show low-skilled workers facing displacement and negative productivity effects, particularly in non-urban contexts. High-skilled workers in urban environments enjoy increased labour demand and wages. Consequently, urban areas experience sharper wage inequalities as digital technologies spread, concentrating wealth and amplifying disparities among occupational groups.

Spatial Economic Analysis
Politecnico di Milano (IT)
Openalex Percentile: Top 6%
Digital Economy and Work Transformation
4.20
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Cities as catalysts of wage inequalities from digitalisation — Camilla Lenzi, Elisa Panzera, et al. · Spatial Economic Analysis (2025) | TGRS Research Map | TGRS