Wage Inequality and the Changing Organization of Work

This paper is about the relationship between multitasking and wages. We provide a theoretical model where workers with a wider span of competence (higher level of mul-titasking) earn a wage premium. Since abilities and opportunities to expand the span of competence are distributed unequally among workers across and within education groups, our theory explains (1) rising wage inequality between groups, (2) rising wage inequality within groups, and (3) the polarization and decoupling of the income distribution. Using a rich German data set covering a 20-year period from 1986 to 2006, we provide empirical support for our model. (95 words