Technological shocks and income inequality: an empirical investigation in Europe

The reduction of social and economic inequalities and the need to structure new forms of public intervention in order to guarantee the full social inclusion of all citizens have always been at the centre of the debate on how to organize and evolve the welfare state. Over the last forty years, the goal of increasing the efficiency and effectiveness of social protection systems has been placed firmly at the centre of policy makers' agendas. The aim of our paper is threefold. First, we test for the existence of a Kuznets curve analyzing a panel of 31 developed European countries in the pe-riod 2007-2018. Second, by exploiting the skilled-biased technological change (SBTC) hypothesis (Goldin and Katz, 1998; Galor and Moav, 2000; Aghion, 2002), we find that the change in the employment share of the high-tech sector is the main driver of the Kuznets swing. Third, in the field of social protection, we investigate what are the main policy implications than can be drawn in a similar context.