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Technical Change and Superstar Effects: Evidence from the Rollout of Television†

Technical Change and Superstar Effects: Evidence from the Rollout of Television† AbstractTechnical change that extends market scale can generate winner-take-all dynamics, with large income growth among top earners. I test this “superstar model” in the entertainer labor market, where the historic rollout of television creates a natural experiment in scale-related technological change. The resulting inequality changes are consistent with superstar theory: the launch of a local TV station skews the entertainer wage distribution sharply to the right, with the biggest impact at the very top of the distribution, while negatively impacting workers below the star level. The findings provide evidence of superstar effects and distinguish such effects from popular alternative models. (JEL D31, J31, J44, L82, L88, O33) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review Insights American Economic Association

Technical Change and Superstar Effects: Evidence from the Rollout of Television†

American Economic Review Insights , Volume 5 (2) – Jun 1, 2023
17 pages

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References (1)

  • Acemoglu Daron (1998)

    1055

    Quarterly Journal of Economics, 113

Publisher
American Economic Association
Copyright
Copyright © 2023 © American Economic Association
ISSN
2640-205X
eISSN
2640-2068
DOI
10.1257/aeri.20210539
Publisher site
See Article on Publisher Site

Abstract

AbstractTechnical change that extends market scale can generate winner-take-all dynamics, with large income growth among top earners. I test this “superstar model” in the entertainer labor market, where the historic rollout of television creates a natural experiment in scale-related technological change. The resulting inequality changes are consistent with superstar theory: the launch of a local TV station skews the entertainer wage distribution sharply to the right, with the biggest impact at the very top of the distribution, while negatively impacting workers below the star level. The findings provide evidence of superstar effects and distinguish such effects from popular alternative models. (JEL D31, J31, J44, L82, L88, O33)

Journal

American Economic Review InsightsAmerican Economic Association

Published: Jun 1, 2023

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