The Effects of Digitalisation on Labour Market Polarisation and Tax Revenue

Digitalization is sometimes described as the third industrial revolution. What insights can be gained from comparing the present situation to the state of society at the outset of the first industrial revolution some two-and-half centuries ago?

From the late 18th century onwards, it led to an upheaval in work and livelihoods at a time when there were few social safety nets. The rapid transformation of economies and societies triggered a drive to create new social and political institutions to manage and reduce the social costs of change.

Universal education, social security and pension systems were introduced. Spurred by hazardous and difficult work conditions, as well as excessively low pay, labour organised into trade unions to become a counterweight to employers and owners of firms. Societies developed methods to handle change and devised ways to resolve conflict through rules and negotiations, rather than through force.


Blix, Mårten (2017), "The Effects of Digitalisation on Labour Market Polarisation and Tax Revenue". CESifo Forum 4/2017, Vol. 18, 9–14.

Interdisciplinary European Studies

The European Union in a Changing World Order


This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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