Technological Introduction and within-Firm Economic Rewards: Do Occupational Classes Matter?

This study investigates the impact of technology introduction on within-firms wage and employment outcomes of occupational groups. While existing literature extensively discusses the labor-augmenting and labor-replacing effects of technology on task-based and skill-based occupational groups, it overlooks how technology-related individual outcomes may depend from workers' structural position (ie. occupational class) in the organizational hierarchy. Therefore, we compare predictions from occupational class theory and relational inequality theory - both emphasizing the role of employment relationships and categorical distinctions for the appropriation firm-generated rents - with those from the "flexibilization" theory, which links technological change to the erosion of internal labor markets and a surge in inter-organizational mobility and demand of general knowledge.

Utilizing German administrative data linked with firm-level information on ICT investment, we adopt a matched event-study framework by estimating a series of triple-difference models on wage, unemployment, and retention outcomes. To assess whether the potential class-biased effects of technology vary according to other stratification measures identified from the relational inequality theory—tenure, age, and workplace unionization—we run subgroups regressions. Occupational classes are derived from the Oesch's class scheme, excluding the self-employed. We compare each manager-production/service worker dichotomy within each work logic in order to account for potential heterogeneous effects of technology on different productive segments.

Preliminary results indicate that managerial occupations see increased wages following technological introduction, whereas lower class workers enjoy no significant effects. Additionally, ICT introduction correlates with higher retention probabilities for both managerial and lower-class highly tenured workers. These findings do not adhere to the flexibilization theory, as occupational classes and seniority influence the ability to harness technology-induced rents, partially confirming the validity of theories on employment relationships. The work also features a discussion over the implications of our results for class theory as well as their external validity.