Information economy and inequality: Wage polarization, unemployment, and occupation transition in Taiwan since 1980

This paper examines whether Taiwan’s economic inequality has worsened as Taiwan has evolved into an information economy, a transformation which began around 1980. The paper explores this relationship by investigating three specific research questions. First, has there been a rise in wage inequality in Taiwan since 1980; and if so, what are the sources of this rise in inequality? Second, has the transition to an information economy contributed to a rise in unemployment rates? And third, what type of occupational structural transformation occurred during this transition? The paper shows that since 1980, wage inequality, unemployment, and the white-collar–blue-collar worker employment ratio have all sharply increased in Taiwan. Furthermore, the reasons for these changes seem closely related to the relative growth of the information economy. 2008 Elsevier Inc. All rights reserved. * Correspondence address: 1636, West 6th St., Apt. L, Austin, TX 78703, USA. Tel.: +1 512 656 4598. E-mail address: [email protected].