Europe's industrial upgrade means fewer jobs, but higher wages

A new study finds that when European countries shift their economies towards more complex industries, they create fewer jobs overall. But the jobs that remain pay more, and income inequality goes down.

Governments have pushed for economies to move into higher-value, more complex industries. They assumed this would create more and better jobs. This paper shows that in Europe, this shift has actually meant fewer jobs, even if the remaining jobs pay better and reduce overall inequality. It quantifies a trade-off that economic planners must now explicitly consider.