Paolo Angelini: Labour market policies and institutions

Welcome address by Mr Paolo Angelini, Deputy Governor of the Bank of Italy, at the 7th Bank of Italy and CEPR Conference on "Labour market policies and institutions", Rome, 19 September 2024. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen,

It is with great pleasure that I welcome you today to the seventh edition of the workshop on labour market policies and institutions, co-organized with the CEPR.

The labour market is a key component of our economies, providing the foundation for individual livelihoods and societal well-being. The Covid-19 pandemic and its aftermath have accelerated long-term trends that are reshaping our labour markets: technology adoption and rising inequalities. These two issues are receiving much attention, and rightly so, in my view. They run through the papers that will be presented over the next two days, and will be addressed by our keynote speakers. In my remarks today, I would like to share some thoughts on these two related themes.

First, the pandemic accelerated the digitalization of our societies. As a result, the demand for workers with digital skills has risen sharply. While this transformation has created new job opportunities, it has also deepened existing wage inequalities, as it mostly benefited high-paid and highly educated workers. Automation and generative AI are an important part of this process. These innovations can potentially improve labour productivity and the quality of work, but they also risk displacing some types of jobs, this time also at the top of the earnings distribution.

While the ultimate impact of the new technologies on welfare and inequality is still uncertain, it is clear that it can be potentially large. Therefore, careful monitoring and analysis will be required to guide policy design in areas such as social protection, welfare and education. It is a privilege to have Professor David Autor as our keynote speaker on this important topic. His contributions to the literature on the impact of technology on the labour market and on inequality have set milestones in these fields.