Technological Change,Job Risk,and Wage Premium: Evidence from Taiwan

The paper reports the results of analyzing the effects of technological change and job risk on wage premiums in Taiwan. Using unique individual data combined with industry‐level indices of technological change and fatality rates across industries, the empirical results show that, overall, industries characterized by a higher rate of technological change or fatality pay a higher wage. However, these positive correlations are attributed to the sorting effect in which workers with some specific features choose to find jobs in industries with rapid technological change and higher job risk. Furthermore, this paper reports a positive relationship between education and wages after controlling for individual heterogeneity, showing the existence of education premium in Taiwan.