Abstract (eng)
Knowledge intensive business services (KIBS) and its subfields – the technology-oriented KIBS (TKIBS) and information and communications technology (IKT) – are central drivers of innovation based structural change (IBS) in Austria. Due to locational advantage, dense labor markets and knowledge spillovers, employment in these sectors is concentrated in and around urban municipalities. In this thesis, I analyze to what extent the employment in KIBS affects the level of income inequality within Austrian municipalities. The relationship between employment in KIBS and inequality on the regional scale has received relatively little attention in the literature and has so far not been analyzed in the Austrian context. Income inequality, however, is particularly important on a small-scale regional level. On this local scale, it affects the social structure and social relations, and therefore societal outcomes and individual behavior.
I use descriptive statistics, an OLS regression model and spatial econometric regression models to analyze the relationship between the employment in KIBS and the level of income inequality within Austrian municipalities (N = 2297). Bivariate statistics show that the level of employment in KIBS, TKIBS and IKT is positively correlated with the amount of income inequality. The polarization of the income distribution, measured by the 90/10 point ratio, shows a weaker correlation to the employment in KIBS than the overall distribution of incomes, as measured by the Gini index. The results of the regression analysis are somewhat ambiguous. In the basic specifications, the level of employment in KIBS is positively related to the income inequality. However, the relation becomes negative when including the educational level and average incomes as covariates. I interpreted these results as support for the argument that the higher income inequality in municipalities with higher employment in KIBS is due to the higher incomes within these sectors, earned by well-educated individuals. The reversal of the coefficient when controlling for the educational level and average incomes, however, implies that the income inequality within these sectors is lower than in other sectors.
The results imply that income inequality needs to be considered as a potential repercussion of IBS – also on a small-scale regional level. Measures aimed at decreasing educational inequalities might contribute to dampening the effect of IBS on income-inequality.