There is a growing skill bias in the labour market institutions and welfare states of advanced democracies

The adoption of information and communications technology has given rise to a skill bias: those with higher-level skills have had their employment prospects enhanced, while those with lower-level skills have been more likely to find their jobs replaced by machines. Drawing on evidence from Germany, Sebastian Diessner, Niccolo Durazzi and David Hope illustrate that this skill bias has had a far wider societal impact than is commonly recognised, with many of the core institutions that underpin advanced political economies being adapted to enable firms to meet the new challenges of the knowledge economy.