| This paper analyzes the interaction between innovation, organizational change and earnings inequality. Within an endogenous growth framework, organizational change is defined as a multi-tasking structure with moral hazard. The model shows that new job design complementary to innovation is inequality increasing. However, the extent of inequality depends on the nature of training costs associated with multi-tasking: effort vs. wages costs. Effort costs characterizing on-the-job training are more likely to reduce wage inequality between firms, and leave wage differentials within firms unchanged. This model could contribute to explain that some countries like Germany or Japan have witnessed a narrower inequality development during the recent decades by comparison with the United States, German and Japanese firms relying more on continuous training to help employees cope with organizational change. |