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Working Papers, No. 2024-19, September 2024 Crossref
How Demand for New Skills Affects Wage Inequality: The Case of Software Programmers

We study how the demand for programming skills has impacted inequality. We create a new dataset with information on wages, employment, and software of Brazilian programmers, covering the period from the birth of information technology (IT) to the rise of artificial intelligence (AI). High-ability, high-wage, and highly educated individuals in key technology hubs are more likely to become programmers. Creating software boosts both wages and career prospects of programmers, especially for those with specialized skills in AI and cybersecurity. These wage gains are concentrated among top programmers, increasing inequality within the profession. Therefore, increased demand for specialized skills in programming has contributed to wage inequality both within the programming field and between programmers and other occupations.


Working papers are not edited, and all opinions and errors are the responsibility of the author(s). The views expressed do not necessarily reflect the views of the Federal Reserve Bank of Chicago or the Federal Reserve System.

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