Article

Explaining Job Polarization: Routine-Biased Technological Change and Offshoring

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Abstract

This paper documents the pervasiveness of job polarization in 16 Western European countries over the period 1993–2010. It then develops and estimates a framework to explain job polarization using routine-biased technological change and offshoring. This model can explain much of both total job polarization and the split into within-industry and between-industry components.

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... It has been driven by technological progress and globalisation and has contributed to rising wage polarisation in many countries (Autor et al., 2003;Goos et al., 2014). Over the past decade, a growing body of research has studied the evolution of the task content of jobs. ...
... Economists have studied the changes in the task content of jobs -within and between occupations -as a key method to track changes in the nature of work attributed to technological progress and globalisation, particularly offshoring (Autor et al., 2003;Spitz-Oener, 2006). Most previous research studying the evolution of the task content of jobs focuses on developed countries (Goos et al., 2014;Hardy et al., 2018) or middle-income countries (Arias et al., 2014;Reijnders and de Vries, 2018). That research assumed that occupational task demands are identical across countries and can be quantified using the task content measures proposed by Autor et al. (2003) and Acemoglu and Autor (2011) based on the US O*NET data. ...
... Previous studies on high-income countries (Autor and Dorn, 2013;Goos et al., 2014) often used RTI. It captures the differences in the task demand across occupations, and quantifies the potential substitutability of human work in various jobs with routine-replacing technologies based on algorithms. ...
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We establish new stylised facts about the global evolution and distribution of routine and non-routine work, relaxing the common assumption that occupations are identical globally. We combine survey data and regression models to predict the country-specific routine-task intensity of occupations in 87 countries employing over 2.5 billion workers, equivalent to 75% of global employment. From 2000 to 2017, the shift away from routine work was much slower in low-and middle-income countries than in high-income countries, widening gaps in the nature of work. Low-and middle-income countries remained the dominant provider of routine work. Not accounting for differences in occupation-specific job tasks across countries leads to a significant overestimation of the role of non-routine tasks in less developed countries.
... The task approach has become the main framework of reference to analyse both structural changes in labour markets (Autor et al., 2003;Acemoglu and Autor, 2011;Goos et al., 2014) and distributional implications (Autor et al., 2008;Lemieux, 2008). Classifying occupations by task content has proved particularly effective in explaining long-term labour market dynamics and in identifying the jobs that are more exposed to structural transformations such as technological change and globalization. ...
... 6 Consequently, we end up with 4 DOT variables linked to their corresponding O*NET match on similar scales. Subsequently, building on existing literature (Autor and Dorn, 2013;Goos et al., 2014) we combine matching DOT-ONET items into a normalised occupation-specific (o) and time-varying (t) index of routine intensity: ...
... 20 Our variable of interest is the long-term change in routine task intensity within an occupation, ΔRTI o, t . Similar to Goos et al. (2014), estimates are performed at the occupation-by-industry level to control in a flexible way for industrylevel drivers such as globalization that may influence employment change. As a variant of the long-term 30-year model, we also estimate Eq. (5) where all decades are stacked together. ...
Article
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The present study adds to the literature on routinization and employment by capturing within-occupation task changes over the period 1980–2010. The main contributions are the measurement of such changes and the combination of two data sources on occupational task content for the United States: the Dictionary of Occupational Titles (DOT) and the Occupational Information Network (O*NET). We show that within-occupation reorientation away from routine tasks: i) accounts for 1/3 of the decline in routine-task use; ii) accelerated in the 1990s, decelerated in the 2000s but with significant convergence across occupations; and iii) allowed workers to escape the employment and wage decline, conditional on the initial level of routine-task intensity. The latter finding suggests that task reorientation is a key channel through which labour markets adapt to various forms of labour-saving technological change.
... Thus, despite the popularity of task-based approaches to estimate labour market effects of computerisation (e.g. [11][12][13][14]), they might not be able to adequately capture nuanced variations in the degree of digitalisation of occupations. ...
... To identify jobs that rely intensively on routine and digital tasks, they employ the most recent release of the ICP survey, which already dates back to 2012. Besides constructing an indicator to account for the routine task-intensity of jobs following a similar methodology as in [14], the authors also construct two indicators to account for workers' use of digital technologies. Their first digital indicator is based on two questions of the survey in which workers are asked about the frequency in which they use emails and the frequency and complexity of tasks they perform involving computers and information systems. ...
Article
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Digitalisation is assumed to have far reaching consequences for workers. So far, these have been analysed using indicators derived from survey data on occupational tasks. Survey-based indicators measure what people do at work but provide little insight into the skills required to perform a task. Since multiple skills may be necessary to perform a task, approximating digital skills through tasks may underestimate the extent of digitalisation of a given occupation. Besides, they provide limited coverage in terms of periodicity, scope and variety of tasks. We therefore suggest to change the perspective from tasks to skills and propose to analyse the digital skill requirements of occupations. To this end, we use detailed information on the classification of European Occupations, Skills and Qualifications, natural language processing tools and network analysis methods to determine digital skills in the database. We construct four different versions of the digital competencies indicator identifying occupations that depend highly on digital skills. Our indicator can be mapped to the ISCO-08 classification and easily be used alongside other data sources. We show that compared to an indicator based on ICT-tasks derived from the OECD 'Programme for the Assessment of Adult Skills', our indicator captures more complex and specialised digitalised occupations. Our results stress the importance of using granular data in order to properly identify digital skill requirements of jobs.
... From a theoretical standpoint, however, several forces are at play in shaping employment changes due to automation. First, as humans and computers compete for the allocation of routine task inputs, substitution/ displacement is expected to take place as the latter become relatively cheaper and/or more productive Goos, Manning, and Salomons 2014;Acemoglu and Restrepo 2018). Robots' capability to perform an ever-increasing number of routines raised the concern about whether they will replace jobs in the future (Gentili et al. 2020). ...
... We start by using a series of the 41 working activities (tasks) categorized according to the cross-partition proposed by Autor, Levy, and Murnane (2003) (see Table A.1 in the online Appendix for further details). Using this taxonomy, we calculate the Routine Task Intensity (RTI) index by using the following formula proposed by Autor and Dorn (2013) and Goos, Manning, and Salomons (2014): ...
Article
During the last decade, a growing literature has been assessing the impact of industrial robots on productivity and employment. At the local level, the labour-displacing effect of robot adoption can be counterbalanced by a task reallocation between manufacturing industries characterized by similar/related occupational spaces. This reallocation process can be also influenced by the average degree of occupational complexity of the local labour markets. To test for the mediating role of similarity and complexity in the robot-employment-productivity relationship, we develop a two-step analysis mixing information from different data sources on 15 industries and 39 local labour market areas of the Emilia-Romagna region in Italy, for the period 2008–2017. Our analysis shows that higher exposure to robots does not affect the aggregate level of labour productivity, but, rather, is associated with a decline in (high routine) employment after three years. We further show that the negative relationship between robots and employment decreases, or even vanishes, in local labour markets with high cross-industry occupational similarity and low occupational or task complexity, and within industrial districts.
... In general, it might be useful to think of these factors in a framework of the demand for and supply of certain types of workers. While processes like automation and offshoring affect the demand for certain occupations and related skills (Ottaviano et al. 2013;Goos et al. 2014), processes such as the expansion of higher education affect the supply of skills found amongst the labour force (Ansell and Gingrich 2018). These dynamics have also been described as the 'race between education and technology' (Goldin and Katz 2008). ...
... Throughout the last two decades this thesis has been challenged, particularly following the introduction of the 'routine-biased technological change' hypothesis by Autor et al. (2003). In line with this hypothesis, several studies have shown that technology functions as a substitute for routine jobs in which workers perform routine manual and cognitive tasks, whereas it complements (high-skilled) workers performing analytical activities and (low-skilled) workers providing interpersonal services (Spitz-Oener 2006;Oesch and Rodríquez-Menés 2011;Goos et al. 2014;Van Vliet et al. 2021). Technological change is therefore not only associated with employment growth in high-skilled occupations, but in low-skilled occupations as well and thereby leads to polarization instead of general upskilling of the labour force (see, however: Such a rapidly changing environment characterised by an increasing demand for skills asks for investments in education and training in order to expand the size of the stock of human capital as well as its quality (Van Vliet et al. 2021;Garritzmann et al. 2022). ...
Article
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The realisation of not just more, but also better jobs has been on the policy agenda for over twenty years. Considering that the idea that investments in human capital should enable the creation of both more and better jobs constitutes a central element of the social investment perspective, it is striking that job quality has hardly figured as a subject of study within the literature on social investment. The majority of studies focuses on employment and redistributive effects instead. This could be caused by the fact that job quality constitutes a multi-faceted concept with many dimensions, which creates several methodological challenges-particularly in a comparative context. Nevertheless, multiple indicators of job quality and its underlying dimensions have been developed by now. These are, however, mostly limited to either a single country or single cross-sections of data, thereby limiting the possibilities for comparisons between countries or over time. This paper therefore introduces new indices that facilitate the analysis of job quality through an internationally comparative framework over time. They are based on multiple dimensions such as earnings, discretion, work intensity, the work environment, and working hours. The indices are available for multiple cross-sections of European countries since 1995, which coincides with the period during which a 'social investment turn' can be observed in many countries. Bivariate correlations and regression analyses are used to assess the relationship between spending on social investment policies and job quality. The analyses indicate that social investment is positively associated with job quality. This holds for all the policies studied here: education, ECEC, and ALMPs.
... More in detail, labourers and elementary service occupations (the low-paid) are to some extent increasing and professionals (the high-paid) are considerably growing, while middling occupations (such as operators of machinery/electronic equipment) are declining. This U-shaped curve represents the aforementioned polarisation phenomenon, supported by pieces of evidence related to both flexible labour markets and institutional settings (as in the case of UK and US, see Autor et al., 2006;Goos and Manning, 2007;Goos et al., 2014;Autor, 2019) characterised by a higher degree of employment protection (e.g. Sweden, Germany and Portugal, respectively, Adermon and Gustavsson, 2015;Spitz-Oener, 2006;Fonseca et al., 2018). ...
... They show that while RRTC has indeed triggered strong displacement effects in Europe, it has simultaneously created new jobs through increased product demand, outweighing displacement effects and eventually resulting in net employment growth. This task-based framework builds on Autor and Dorn (2013) and Goos et al. (2014), and incorporates three main channels through which RRTC affects labour demand. Firstly, RRTC reduces labour demand through substitution effects, as declining capital costs push firms restructuring production processes towards routine tasks. ...
... Autor et al. 2008, Acemoglu e Autor 2011, Autor e Dorn 2013, Goos et al. 2014, Atalay et al. 2018. Non è immediatamente chiaro se e in che misura la polarizzazione del lavoro indotta da RTBC si traduca in polarizzazione salariale(Atkinson 2008, Antonczyk et al. 2010. ...
... Nel loro modello, Autor e Dorn (2013) sono espliciti sulle condizioni in cui ci si aspetta che la polarizzazione del lavoro sia accompagnata dalla polarizzazione dei salari e introducono il noto Routine Task Index (RTI) per l'economia statunitense, che è l'indicatore più adatto per valutare la presenza di RBTC sul mercato del lavoro.Firpo et al. (2013) si concentrano in particolare sulle dinamiche salariali, con l'obiettivo di valutare il contributo delle occupazioni all'evoluzione della disuguaglianza salariale negli Stati Uniti. Sviluppano un modello che spiega la polarizzazione salariale osservata negli Stati Uniti come determinata dai cambiamenti nei rendimenti dei compiti, dall'esposizione alla delocalizzazione di diversi lavori e dalla de-sindacalizzazione. Alcuni articoli hanno evidenziato che i lavoratori non di routine guadagnano più dei lavoratori ordinari, sia a livello occupazionale(Acemoglu e Autor 2011, Goos et al. 2014) che a livello di lavoratore(Autor e Handel 2013, De la Rica et al. 2020. Per quanto riguarda i Paesi europei,Naticchioni et al. (2014) concludono che ci sono prove deboli che tale automazione stia causando la polarizzazione salariale in Europa. ...
Technical Report
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Il presente volume si colloca in continuità con precedenti rapporti di ricerca realizzati nell’ambito della Struttura Imprese e Lavoro dell’Inapp, focalizzando l’attenzione su alcune misure di policy che hanno caratterizzato l’esperienza recente del nostro Paese in tema di imprese, di lavoro e di contrasto alla povertà (e riduzione della disuguaglianza) – collocandole sullo sfondo di una dinamica del mercato del lavoro permeato da un graduale eppure pervasivo cambiamento tecnologico .
... Past research has explored the impact of new digital technologies on occupations outcomes such as wages and unemployment [20,21]. Most considered AI the main factor for labor market distribution and polarization [22][23][24]. The wage difference between high-skilled and lowskilled laborers continues to widen as manifested in the continuous tilt of income distribution to the group of highly educated and skilled laborers. ...
... On the one hand, it is demonstrated that the phenomenon of wage losses for displaced workers caused by technological progress and wage premiums arose from emerging skills has already happened among many sectors [34]. On the other hand, it may be the reason U-shaped employment distribution is known as job polarization [23], which makes the effect of AI's displacement risk on occupational employment failing to show significance in the linear regression. ...
Article
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To identify the role of digital skill in the skill-biased technological changes caused by artificial intelligence, this study estimates the impacts of displacement risk on occupational wage and employment and examines the moderation effects of digital skill through the occupational data from the U.S. Bureau of Labor Statistics through the methods of fixed-effects modeling, heterogeneity analyzing and moderation effect testing. The results highlight three main points that (1) the displacement risk by artificial intelligence has significantly negative effects on occupational wage and employment, (2) the heterogeneous effects across occupational characteristics are significant, and (3) the digital skill exerts a significant moderation effect to protect against displacement risk. The core policy implication is suggested to emphasize digital skill in education and training across occupations to accommodate job requirements in the future.
... Almost all of our interviewees expressed concerns about the potential that existed for the acceleration of exploitation of workers, particularly in certain sectors and sub-sectors. In this section of the chapter, we summarise such concerns by focusing on two key aspects of the gig economy that emerge from our analysis, consistent with extant literature (Crouch 2019): that the gig economy has exacerbated the polarisation of the labour market (Goos and Manning 2007;Plunkett and Pessoa 2013;Goos et al. 2014), and that it has widened the power imbalance that exists in each employee/employer relationship. We note also that such an imbalance in favour of the employer, which is often a de facto relationship rather than one that is legally binding, is reflected through a range of issues spanning from time management to health and safety, wages, and gender relationships. ...
Chapter
Based on rich first hand empirical material, the chapter discusses the implications of the gig economy for workers and trade unions in the UK context.
... In identifying predominantly human skills and skills where the replacement by robots already occurred or it will predictability occur, one is driven to the voluminous literature on job polarization or labor market polarization [1,9,18,27,33,37,39]. Supporters of the job polarization argument conceive a scale of tasks from those requiring less skills to those demanding highly valued skills (this can be conceived, as well, as a scale of productivity or even of wages). ...
Article
Full-text available
The world economy is currently witnessing an unprecedented surge in the ability of machines and algorithms to replace human labor, a surge with the potential to accomplish gains of efficiency and productivity that were unimaginable just a few years ago. Nonetheless, the wonders of the artificial intelligence economy are ultimately overshadowed by a series of concerns that decision-makers should account for: fast automation is synonymous with job losses, increasing income inequality, demand imbalances, and various sorts of insecurities and anxieties. The countervailing forces associated with the progress of automation raise doubts about whether the transition to the robot economy should advance full speed ahead. Rather than developing any artificial intelligence, it is necessary to develop the right kind of artificial intelligence. In particular, the progress of automation should be framed by fairness and ethical principles. This study discusses the ethical boundaries of the emergent robot economy. The discussion is supported on a theoretical model that is built and simulated with the goal of illustrating the transition to the robot economy. The virtues and flaws of this transition are considered.
... In the field of work, the positions of the workers' class structure objective and subjective oppositions. In Europe, the polarisation of employment structures (Goos, Manning, & Salomons, 2014), together with the development of new low-skilled and high-skilled occupations, the intensification of work (Green & Mac Kintosh, 2001;Green, 2004), and the transformation of tasks associated with jobs (Gallie, 2019), call into question the forms of subjective relationships that Europeans have to work, with regard to their class, gender, and country of residence. ...
... Others have refuted this skill-biased technological change (SBTC) hypothesis by arguing that digital technology can more easily automate tasks in middle-skill jobs than those in jobs at the higher and lower end of the employment market (Autor et al., 2003). Viewing technological change as routine biased (RBTC) can help explain the trend towards greater job polarisation observed in previous decades in the U.S and some parts of Europe (Goos and Manning, 2007;Goos et al., 2009Goos et al., , 2014. ...
... On the contrary, our interpretation is fully consistent with the Routine Biased Technological Change (RBTC) literature, according to which the diffusion of information and communication technologies played a pivotal role in the delocalization of capital intensive manufacturing industries in industrializing countries within global value chains supported by intense flows of foreign direct investments and systematic global outsourcing (Autor et al., 2003;Ebenstein et al., 2014;Goos et al., 2014). Firms in advanced countries progressively shifted the core of their activities towards knowledge intensive activities such as R&D and engineering with low intensity of physical capital. ...
Article
The paper articulates and tests the hypothesis that the current direction of technological change is knowledge- rather than capital intensive. The new accounting procedures that identify and quantify intangible assets allow us to test the role of capitalized knowledge as an input in the technology production function. The micro-level evidence from US listed companies included in Compustat, over the period 1977–2016, confirms that the direction of technological change has been increasingly knowledge intensive and tangible-capital saving. It also shows that this trend has increased in its strength over time and across all US sectors. The most dramatic increase in the output elasticity of knowledge occurred in the high-tech and manufacturing sectors. Furthermore, the output elasticity of tangible capital has constantly reduced in the consumer and high-tech sectors over time.
... In general for developed countries a slightly negative impact of GVC participation is confirmed as far as backward linkages are considered, whilst in the case of forward linkages the association may be ambiguous . 6 4 Importantly, a relevant research question concerns the role played by the technological progress and the related process automatization which is widely described in the literature (among others Acemoglu & Autor, 2011;Acemoglu & Restrepo, 2018;Goos, Manning & Salomons, 2014). Moreover, recently increasing attention is being paid to the role of new technology on the labour market (Gruetzemacher, Dorner, Bernaola-Alvarez, Giattino, & Manheim, 2021). ...
Article
This study examines the linkages between GVC involvement and wages in Poland given different wage bargaining schemes. The analysis is based on microdata from the European Structure of Earnings Survey for Poland combined with sectoral data from the World Input-Output Database. In particular, two measures of GVC involvement were used: the share of foreign value added (FVA) to export and the measure of traditional offshoring. The institutional settings are represented by the wage bargaining scheme which reflects the level at which the collective pay is agreed. The results show that despite the lack of a significant relationship between the sectoral involvement in GVC and the level of wages in Poland, on average workers covered by the collective pay agreement receive higher wages. Moreover, the wage-GVC nexus is conditioned on the type of pay agreements: the positive wage effect from national agreements is eliminated for a certain range of GVC intensity.
... Available data for the last 30 years show that most of the new jobs created in OECD countries were mainly at the high and low end of the labor market, while jobs in the middle (jobs of medium-level specialization, and medium-level earnings) have been significantly reduced. This is well documented by a number of studies on the actual 4 shrinkage or decline of the "middle" in the income hierarchy as a result of developments in the labour market and redistribution policies (Dallinger 2013;Goos M. et al. 2014;ILO 2016;OECD 2019;Özkiziltan and Hassel 2021) leading to an increased polarization of income distribution (Figure 1 depicts this trend in a number of OECD countries, with the exception of Ireland and France 3 ). As the current crisis accelerates digital technology, the elimination of these intermediate-level jobs is expected to be much faster than we have seen in the past, and this will further deepen polarization and inequality. ...
Chapter
This chapter examines the challenges posed to the European welfare states by the combined effects of ecological, health and socio-economic crisis. It consists of three parts. The first part briefly traces major trends in inequality and polarization prior to and under the impact of the current health and economic crisis. These trends are considered in light of the ongoing triple transition, green, digital and demographic and the ensuing changes in social risks, vulnerabilities and needs. On the basis of the available empirical data on environmental and social performance, the second part briefly reflects upon the way the different welfare regimes in Europe (the social-democratic, the corporatist, the liberal, and the hybrid Mediterranean welfare regime) manage the intersection of social and environmental policies, and highlights the sustainability challenges they are confronted with. The third part further expands on the growing and changing demands on the European welfare states. It critically reviews alternative agendas for the future (“green growth” versus “degrowth”/” postgrowth”) and tackles the question of which eco-social trajectory can be conducive to building a sustainable welfare state. The conclusion wraps up the main arguments.
... In the meantime, the study of Autor et al. (1998) shows that the demand for computers and skilled laborers is high, which leads to polarization in the USA. The studies of Acemoglu and Autor (2011);Goos et al. (2014);Michaels et al. (2014);and Ju (2014) found that as technology advances, the demand for "middle-skilled" labor declines while high and "low-skilled" labors continue to grow. Moreover, Sachs and Kotlikoff (2019) propose that insolent innovations accompany untalented work by youth, resulting in lesser earnings for incompetent youth and impeded efforts to obtain skills. ...
Article
Full-text available
In Saudi Arabia, limited studies have developed models related to measuring the impact of the digital economy on the labor market. This model concerns the agricultural, service, and industrial sectors in Saudi Arabia. This study further investigates the relationship between digitalization, labor productivity, and unemployment using the ARDL error correction method for time-series data obtained from the World Bank database for the period of 2001–2019. The findings of this study illustrate, digital variables such as fixed broadband subscriptions (LNFBS), mobile cellular subscriptions (LNMCS), and computer, communications, and other services (LNCCO) do not significantly affect the labor market in the agricultural sector. LNMCS and LNCCO do not influence the service sector. However, they are negatively influencing the industrial sector and labor productivity. In contrast, LNFBS has a positive impact on both the service and industrial sectors. Interestingly, all three digital variables significantly reduce unemployment in the long run in Saudi Arabia. However, in the short run, digitalization does not have a positive impact on the economy. This study hopes to benefit policymakers in considering how to reorganize the socioeconomic infrastructure to balance economic growth through greater technology and the utilization of the country’s human resources.
... Even more recently however, scholars observed changes in the wage structure that did not fit into the narrative of SBTC: The USA and other developed countries experienced a declining share of occupations in the middle of the wage distribution, while those at the lower and upper tail increased (e.g., Autor et al., 2008;Goos & Manning, 2007;Goos et al., 2009). This job polarization has been connected with a de-routinization of the labor force, a declining share of employment in occupations with a high content of routine tasks, i.e., that are performed by following well-defined sets of procedures (Goos et al., 2014;Jaimovich & Siu, 2020). In turn, this decline of routine-intensive occupations has been attributed to the fact that new technologies are particularly effective at executing such types of tasks: Autor et al. (2003) ascertained that computer technology tends to substitute workers in routine jobs while complementing those in non-routine occupations, also known as routine-biased technological change (RBTC). ...
Article
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I investigate the role of labor market flows in the decline of routine employment in Switzerland between 1992 and 2018 using rich individual-level panel data from the Swiss Labour Force Survey. Existing research on the labor market effects of digital transformation has identified jobs with a high content of routine tasks as particularly prone to automation. My analysis shows that the decline in routine employment was almost entirely driven by decreasing inflow rates from non-participation and non-routine occupations as opposed to increasing outflow rates from routine jobs. Performing Oaxaca-Blinder-type nonparametric decompositions, I find that these inflow rate decreases can primarily be accounted for by changed propensities to transition into routine occupations, whereas demographic changes play a minor role. The propensity to transition from non-routine into routine employment has decreased for all distinguished demographic groups, while the propensity to enter the labor market into routine cognitive employment has particularly decreased for middle-aged individuals and those with low or medium education. My findings suggest that the Swiss labor market is evolving differently than the US labor market in the wake of the digital transformation.
... 31. Given that the technological changes of the past decades appear to be skill/task biased and that low-educated workers are typically less skilled and often doing more routine tasks (Goos, Manning, and Salomons 2014), the hysteresis in social norms discussed by Doeringer and Piore (1985) and Skott (2005) could lead to the overpayment of low-educated workers whose productivity might have been negatively affected by technological change, and the underpayment of highly (over-) educated workers whose productivity might have increased. 32. ...
Article
We provide first evidence of the impact of over-education, among natives and immigrants, on firm-level productivity and wages. Our results show that the over-education wage premium is higher for natives than for immigrants. However, since the differential in productivity gains associated with over-education outweighs the corresponding wage premium differential, we conclude that over-educated native workers are in fact underpaid to a greater extent than their over-educated immigrant counterparts. This conclusion is refined by sensitivity analyses, when testing the role of immigrants’ background (e.g. region of birth, immigrant generation).
... A growing literature on the effects of automation on the labour market and the risk of job destructionsee, for example, Frey and Osborne (2017) for the U.S., World Bank (2016) for the OECD countries, or McKinsey and Company (2018) for Polandrefers to the job routinisation and polarisation processes described by the model proposed by Autor et al. (2003), which is verified, among others, by Autor et al. (2006), Goos and Manning (2007), Acemoglu and Autor (2011), Autor and Dorn (2013), Goos et al. (2014), andFonseca et al. (2018). 4 The COVID-19 pandemic may have enhanced the technological upgrading on the labour marketas Frey argues "Coronavirus is likely to accelerate automation" 5 -and there are strong arguments in favour of accelerating automation which go beyond the pandemic (Coombs, 2020). ...
Article
https://authors.elsevier.com/a/1gEtS98SGsuXj. Dynamic digitalisation has a profound impact on labour markets, leading to routinisation and job polarisation processes. Most studies on labour polarisation use employment data to track changes in labour demand and incomes across routine and non-routine jobs. In this paper we utilise a database of online job postings published on Polish websites in the period 2017–2019 to map skills the requirements in respective task-content groups. We observe little evidence of job polarisation in the Polish vacancy market, with cognitive, communication, availability, technical, and self-organisation skills being in high demand regardless of the task-content group. With the use of logistic regression we find that non-routine and routine cognitive jobs require a quite extensive, and similar skill-mix. Multinomial logistic results show that communication and cognitive skills enhance the employability in non-routine and routine cognitive jobs, while in the case of non-routine manual jobs these are availability, mathematical and interpersonal skills. Based on these findings, we conclude that the lifelong learning system should focus on developing the transversal skills required in jobs resilient to automation (non-routine jobs). Moreover, we argue that enhancing the transition from routine to non-routine jobs by providing the required transversal skills plays and important role in reducing social inequalities.
... ΔY rt denotes the change in the average job quality indicator of region r over the period t. ′ is a set of start-of-the-period regional control variables, very similar to those considered by Acemoglu and Restrepo (2020a) and , including the share of employment in mining and quarrying and the secondary sector in the region (to which we refer as the share of industry for brevity), population (in logs), share of females, age structure of the workforce, the share of population with middle or high education, the average routine task intensity (RTI; Goos et al., 2014;Mahutga et al., 2018;Schmidpeter & Winter-Ebmer, 2021) and the average offshorability risk (Blinder & Krueger, 2013;Mahutga et al., 2018). 14 Note that using an econometric specification with both outcome and the treatment variable in changes, we control for regional time-constant heterogeneity. ...
Article
Full-text available
Whereas there are recent papers on the effect of robot adoption on employment and wages, there is no evidence on how robots affect non‐monetary working conditions. We explore the impact of robot adoption on several domains of non‐monetary working conditions in Europe over the period 1995–2005 combining information from the World Robotics Survey and the European Working Conditions Survey. In order to deal with the possible endogeneity of robot deployment, we employ an instrumental variables strategy, using the robot exposure by sector in other developed countries as an instrument. Our results indicate that robotization has a negative impact on the quality of work in the dimension of work intensity and no relevant impact on the domains of physical environment or skills and discretion.
... With reference to this first factor, it is argued that digitalisation and, as postulated by Schwab (2016), the so-called fourth industrial revolution has created opportunities for improving living standards, working conditions, and incomes. In the new digital world, a risk of digital substitution of routinised tasks, however, appears which may culminate in the loss of middle-skilled jobs and subsequent crowding around jobs with non-routinised but low-skilled tasks (e.g., requiring physical dexterity or social skills) and -to lesser extent -around jobs requiring cognitive skills and creativity of human workers (Acemoglu & Autor, 2011;Goos et al., 2014;Vermeulen & Psenner, 2022). In this context, UBI could be treated as a remedy for the growing insecurity of digital labour markets. ...
Chapter
This chapter identifies the influence of the COVID-19 pandemic on the Polish labour market, covering a 95-week period since the first COVID-19 case in Poland was reported and a similar period before the pandemic outburst. Recently, online job postings have been utilised to analyse the impact of COVID-19 on labour demand. In general, perceptive contraction in the scale of job offers published online was reported at the outburst of the COVID-19 pandemic. Data on online job postings used in this study were retrieved from the System of Online Job Offers, developed by the Institute of Labour and Social Studies in Warsaw, which is a public research institute. Labour market reaction was driven to some extent by lockdowns aimed at mitigating the spread of COVID-19. The demand effect for routine cognitive and non-routine cognitive analytical tasks was smaller, but also positive. The COVID-19 pandemic has led to perceptible changes in all dimensions of socio-economic life.
... According to the skill-biased technological change hypothesis (Autor et al., 1998;Berman et al., 1994;Bresnahan et al., 2002), automation and computerization technologies complement high-skill workers and substitute for low-skill workers. A more recent hypothesis, routine-biased technological change (Goos et al., 2009(Goos et al., , 2014, instead suggests that such technologies complement workers performing non-routine tasks, which tend to be at the opposite ends of the spectrum of skills (high and low). While informative at high levels of aggregation, the crude education-based distinction between high and low skills can be overcome with more fine-grained taxonomies of skills, recognizing cognitive and manual dimensions (Autor and Dorn, 2013); language, reasoning, vision and movement (Elliott, 2014); creative and social intelligence (Frey and Osborne, 2017). ...
Article
Understanding how Industry 4.0 (I4.0) technologies complement each other on one side, and human skills on the other, is an increasingly important concern for managers and policymakers alike: it is essential for the optimization of firm-level sociotechnical interactions as much as it is vital to smoothen the digital transition on a global scale. However, firm-level evidence on patterns of conjoint adoption of I4.0 technologies and their relationship with skills is still scant. The present work contributes to covering this gap by leveraging a large cross-sectional database of Italian firms. Distinguishing between digital and physical I4.0 technologies, we find that companies are primarily (though not exclusively) driven toward either the former or the latter category of technologies. Additionally, we find that both the adoption of digital I4.0 technologies and the adoption of physical ones lead to the upskilling of non-ICT employees alongside ICT-specialized personnel. However, small firms seem to be constrained in their ability to follow the same upskilling strategy as their larger counterparts. This may have key practical implications, especially in the context of recent industrial policies enacted at the European level.
... In particular, task-based analyses can explain the wage and employment polarisation in many industrialised countries (Ebner et al. 2020). Since routine tasks are increasingly replaced by computers, the wage and employment development of medium-skilled employees performing rather routine tasks lags behind that of highand low-skilled employees (Acemoglu and Autor 2011;Antonczyk et al. 2009;Autor et al. 2008;Autor 2013;Dustmann et al. 2009;Goos and Manning 2007;Goos et al. 2014;Lemieux 2006;Spitz-Oener 2006). Recent research applies the task-based analyses to automation probabilities of occupations due the digital transformation (Arntz et al. 2017;Dengler and Matthes, 2018a;Frey and Osborne 2017). ...
Article
The occupational panel for Germany provides a comprehensive database for studying the development of occupations over time. It is based on the IAB Employment History (BeH), which contains all social security notifications that employers have to submit for their employees subject to social security and minor employees. The current version of the panel covers the years 2012–2018. Information on employees is aggregated at the occupational level such as shares by age, qualification or gender. In addition, occupational information from the expert database BERUFENET of the Federal Employment Agency, e.g. the substitution potential or the Digital-Tools Index, is prepared and merged to the occupational panel.
... Writing on the consequences of SBTC Autor and Dorn (2013) show it not only stretches the wage structure between skilled and unskilled but also causes the polarization of the US economy, whereby low and high skilled occupations grow, while middle-skilled occupations decline. Polarization has also been shown to be caused by offshoring (Goos et al. (2014)) and structural change (Bárány and Siegel (2018)). After the wage structure stretch of the 1970s and 1980s, the education wage premium has flattened in the 1990s, which the SBTC hypothesis struggles to explain since computers continued to gain ground in that decade ). ...
Thesis
This thesis’ main objects of interest are the wage returns to education and experience on labor markets, and the earning inequalitiesthese returns generate. It seeks to understand these returns from a matching perspective, by investigating determinants of relationshipformation between workers and firms. The first chapter documents flattening wage returns to experience between higher educationgraduates entering the French labor market in 1998 and 2010. Differences in average wage growth are decomposed by occupation intoan extensive and intensive margin. Two potential mechanisms behind the wage growth slow down are explored: access to managerialpositions and impact of initial match quality. I find access to managerial positions is more infrequent for recent cohorts. I also find thatinitial match quality has not worsened between the 1998 and 2010 cohorts, but its impact on future wages has become more enduring.The second chapter studies the decrease in the education wage premium on the Portuguese labor market between 1987 and 2017.I build a model of one-to-many matching with multidimensional types in which several workers are employed by a single firm. I structurallyestimate the model on matched employer-employee data. Counterfactual exercises suggest that both changes in worker preferences andthe increasing relative productivity of high school graduates over non-graduates act as a mitigating force on the decreasing high schoolwage premium, but do not fully compensate for high school graduates' rise in relative supply. In the third chapter, co-authored with JeremyFox and Alfred Galichon, we explore how expectations on future returns influence matching decisions. We introduce a model of dynamicmatching with transferable utility. We explore aggregate dynamics and show that a stationary equilibrium exists. We propose twoalgorithms to compute a stationary equilibrium and adapt both methods for estimation.
... H. Autor & Dorn, 2013;D. H. Autor & Handel, 2013;Beaudry et al., 2016;Fernández-Macías & Hurley, 2017;Goos et al., 2009Goos et al., , 2014Goos & Manning, 2007;Michaels et al., 2014;Spitz-Oener, 2006). Therefore, creating a concept about technologies and their impact on human labor requires the detailed delimitation of main terms like digitization, digitalization, and digital transformation to understand at which stage of change the impact on human labor becomes relevant. ...
Chapter
The Covid-19 pandemic has brought widespread disruption to labor markets around the world. The pandemic has led to a dramatic shift in expected skill requirements, and it has forced people to acquire new demanded skills, including digital skills, to succeed in the workplace or find a job. Hence, the competition of higher education graduates in the labor market is now changing shape. Accordingly, young workers (15–24 years old) have a greater risk than older ones of being pushed out of the labor market since the current situation shows that higher education graduates do not have enough high-level digital skills in many countries. Although younger adults with a higher education degree are less likely to be unemployed than other educated adults, it is obvious the digital transformation in the workplace might affect them negatively if they cannot update their skills for the post-pandemic world.
Article
Climate protection is a global public good. The related mitigation policies implemented by a single country could have little effect on climate change issue such that there could be no net gains for society. However, those measures might create winners and losers among individuals. We investigate the citizens' support for different pro‐climate policies in EU countries, by considering the degree of heterogeneity in their attitudes towards climate issues using a cluster analysis. We also exploit the extent to which carbon intensity and green skills requirement of jobs contribute to supporting climate policies. Our results suggest that individuals' occupational exposure does matter: people in emission‐intensive activities tend to be against stringent climate measures, whereas people in jobs that require high levels of green skills are in favour of them.
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We investigated how the adoption of a new production technology differently affects the risk of job separation of young and old employees in South Korea by analyzing establishment-level panel data linked with administrative employment insurance records on individual workers. To address potential endogeneity associated with a firm’s technology adoption, we conducted instrumental variable estimations with a two-stage residual inclusion (2SRI) approach. The results suggest that technology (indicated by newly adopted automation and increased purchase of Information Technology equipment) positively affects the overall employment of incumbent workers. However, the employment of aged workers is less favorably affected by newly adopted technologies compared to that of younger workers. In some conditions, technology adoptions increase the retirement risk of older workers absolutely as well as relative to that of younger workers. Newly adopted automation negatively affects the employment of aged workers who are engaged in clerical and support occupations or employed in the wholesale and retail industry. Estimation results according to the reason for retirement suggest that the negative effect of technology adoption on employment may be related to both labor demand and supply.
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In this paper, we identify the role of technological change in explaining the evolution of US entrepreneurs. We develop a theoretical model in which technology can either increase or decrease the share of the self-employed entrepreneurs in the US labor market. Machines displace routine-intensive jobs and force those workers to search for alternative employment, causing the share of the self-employed entrepreneurs to increase (i.e., replacement effect). In contrast, automation amplifies productivity and reduces the comparative advantage of small businesses, leading to a decreased share of the self-employed entrepreneurs (i.e., efficiency-augmenting effect). Using the shift-share instrumental variable identification strategy, our study finds that the efficiency-augmenting effect had a greater impact, which contributed to the declining share of the self-employed entrepreneurs in the US between 1990 and 2010. The empirical results are robust across alternative settings.
Article
Rationale: The world of work is changing rapidly, and precarious employment is becoming more prevalent in Britain and elsewhere, particularly since the 2008 financial crisis. This is despite the evidence linking employment precarity to adverse health outcomes, and the policy discourses advocating for high-quality jobs. Objective: I seek to establish empirically the extent and nature of the potential link between employment precarity and health outcomes, which is done chiefly at the workplace level. The research can be vital from the perspective of informing policy, given that the workplace represents the level where key policy levers operate. Methods: I use nationally representative data from the British Workplace Employment Relations Survey. Four workplace health outcomes (WHOs; viz., injuries, illnesses, job satisfaction, and job anxiety) have been used to examine if organizations with precarious employment arrangements are likely to experience adverse health outcomes. I use alternative econometric approaches to compare organizations that reported to have three types of precarious employment arrangements, viz., shift working, annualised hours, and zero-hours contracts (ZHCs), vis-à-vis their counterparts without such arrangements. Results: The results obtained reveal that workplaces with precarious employment arrangements are significantly unhealthier, and those with the most insecure form of precarious employment perform particularly worst in this respect. Conclusions: Precarious employment may become ever more prevalent as organizations contend with economic fallouts from shocks such as Brexit or Covid-19. This may lead to sub-standard health outcomes. The positive influence of trade unions on working conditions has largely been decimated and the workforce in Britain is ageing. These combinations may pose significant challenges to public health including mental health crises. Public policy ought to help minimise adverse health outcomes linked to employment precarity.
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In the study we explore the evolution of the job structure in the Russian economy during the first 20 years of this century. Does it change through a consequent substitution of relatively worst (in terms of quality) jobs by better jobs? Or through a destruction of middle quality jobs? Or do we observe stagnation and conservation of the job structure? Any structural change of this sort is usually triggered by technological progress that shapes demand for labor of different quality and complexity. In search for clues to these questions, the authors use large data sets which cover two sub-periods divided by the 2008—2009 crisis. The estimates presented in the paper allow reject the polarization hypothesis, and they document a fast upgrade of the job structure during the first sub-period and a much lower upgrade during the second one. Apparently, the risks of job polarization are likely to be minimal until the economic growth is recovered and the movement to the technological frontier is accelerated.
Chapter
After 1991 a new political and economic order was established. During the previous decades, most countries saw an era of global prosperity and economic development without precedents. During the last thirty years, globalisation and technology have changed the functioning of the global economy, but also the world of work. This book tries to shed light on how political and economic transformations have also affected the labour market and vice versa. This first volume of the book, “Globalisation, Technology and Labour Resilience,” is structured in three main sections dealing with globalisation and migration, jobs and technological change and labour agency and resilience.
Article
Purpose The paper aims to empirically examine the impact of foreign direct investment (FDI) inflows and digitalization on employment opportunities in selected 70 developing economies across the world over the period of 2001–2019. The same empirical investigations are also carried out on two groups of these developing countries created on the basis of the levels of FDI inflows and digitalization. Design/methodology/approach The study uses various panel unit root tests followed by the estimations of the generalized method of moments in the dynamic panel framework, using secondary data collected from the World Bank (2020), International Labour Organization (2020) and International Telecommunication Union (2020). Findings Empirical findings reveal that both FDI inflows and digitalization have positive effects on employment; however, the extent of the impact of digitalization is greater than that of FDI inflows in developing economies, mostly in countries with relatively low FDI inflows and low digitalization. Originality/value Conventionally, FDI inflows accelerate economic growth and thus improve the labour market in host countries. However, FDI inflows into developing countries with low-skilled labours may limit job creation, particularly during the process of digitalization. This study shows that despite a much moderate impact of FDI inflows, digital transformation supports a higher employment in developing economies with low level of FDI inflows and digitalization.
Article
Introduction. Highly qualified specialists with higher education are the basis of the economy of any modern state. The choice of a future profession by an individual is an important process for the individual and society. Regardless of the type of competition, resources (time, money) for the training of an expelled student or graduate who does not work by profession are spent inefficiently. Reducing negative consequences is impossible without identifying the reasons for expulsion or employment not in the specialty. Therefore, issues related to the choice of profession, motivation for training and professional activity are relevant. The purpose of the study: to identify the types of students with a high risk of expulsion based on several criteria, including the quality of career guidance. Methodology and methods of research: Theoretical and methodological foundations of research are systemic and institutional approaches. 551 students studying in various fields of study at Perm National Research Polytechnic University (277 girls and 274 boys) took part in the survey. Methods of mathematical statistics: correlation analysis, analysis of conjugacy tables, typological analysis, criterion χ2. The results of the study confirm the relationship between the passage of career guidance measures and the independence of choosing a future profession (r = 0.709). The study allowed us to construct a typology of students according to the criteria of work plans and the availability of career guidance. There are 4 types of respondents: "professionally oriented", "self-determined", "disappointed" and "mistaken". The scientific novelty lies in the fact that the criteria for identifying groups with a high risk of leaving the university, specific to the Russian sample of students, have been identified. The practical significance lies in the possibility of using the data obtained for timely identification of risk groups among students of different courses and carrying out comprehensive measures to reduce the risk of expulsion.
Chapter
Scientific research constitutes the basis for developing new knowledge. Thus, a bibliometric study was conducted to describe the scientific production in the field of digital economy and to group the existing literature into thematic clusters. To achieve these objectives, a search was carried out in Scopus and the Web of Science (WoS) databases. Subsequently, a chronological filter was used limiting the search period from 2000 to 2020, with 86 publications counted. Finally, only “article” and “review” documents were considered subject to blind peer review. In this study, a total of 27 articles were considered. The VOSviewer software, version 1.6.16, was used to perform the bibliometric analysis. Three clusters were identified. The first cluster encompassed all publications that reported changes, as a result of digitization, both at the level of companies and businesses, and at the level of consumer behavior and attitudes. The second cluster included publications that describe improvements in the functioning and communication of countries as a result of the adoption of technologies and the Internet. The third cluster related the digital economy with the implementation, in organizations, of software and tools that allowed to stimulate electronic commerce, in a more secure way and favor international trade.KeywordsDigital economyScopusWeb of Science
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This paper analyses the determinants of wealth inequality, measured as the share of wealth owned by the top 1 percent wealthiest individuals. We find that labor's bargaining power is a significant and important determinant of top wealth shares. Using a semi‐structural vector autoregression (SVAR) model for the period 1970–2019, we estimate that shocks to labor's bargaining power explain 32 percent, 8 percent and 32 percent of the variation around the long‐term trend in wealth inequality in the UK, USA and France, respectively.
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The adoption of digital technologies in the modern business world stays fast‐moving, and managers underutilize the huge potentials entailed by digitalization. Literature concerning labor market developments proposes an assessment on work‐task level, to evaluate job automation susceptibility. The paper is based on this approach and further extends and details the existing models for the determination of efficiency potentials in the field of marketing and sales. Using a qualitative research design, a new descriptive model for tasks is first developed. Based on this, a second model for calculating efficiency potentials is derived in the next steps integrating data from ONET database.
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Das Kapitel beschäftigt sich mit Strukturbedingungen für klimafreundliche Erwerbsarbeit. Damit sind zum einen die Voraussetzungen für klimafreundliches Handeln im Rahmen der Berufstätigkeit gemeint. Zum anderen geht es um die Frage, wie Erwerbsarbeitsstrukturen gestaltet werden müssen, damit Menschen auch außerhalb ihrer Berufstätigkeit ein klimafreundliches Leben führen können. Hofbauer, J., Gerold, S., Klaus, D., Wukovitsch, F. (2022). Kapitel 7. Erwerbsarbeit. In: Görg, C., Madner, V., Muhar, A., Novy, A., Posch, A., Steininger, K., Aigner, E. (Hrsg.): APCC Special Report: Strukturen für ein klimafreundliches Leben. Springer Spektrum: Berlin/Heidelberg., Available at SSRN: https://ssrn.com/abstract=4223121
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We study the impact of ultra-fast broadband (UFB) infrastructures on the total factor productivity (TFP) and labor productivity of firms. We use unique balanced panel data for the 2013-2019 period on incorporated firms in Italy. Using the geographical location of the firms, we merge firm-level data with municipality-level information on the diffusion of UFB, which started in 2015. We derive consistent firm-level TFP estimates by adopting a version of the Ackerberg et al.’s (2015) method, which also accounts for firm fixed effects. We then assess the impact of UFB on productivity and deal with the endogeneity of UFB by exploiting the physical distance between each municipality and the closest optical packet backbone node. Our results show an overall positive impact of UFB on productivity. Services companies benefit the most from advanced broadband technologies, as do firms located in the North-West and South of Italy. We further decompose the impact of full-fiber networks from mixed copper-fiber connections and find that the former significantly contribute to enhancing firm productivity. Finally, by exploiting Labor Force Survey data, we provide suggestive evidence that productivity increases from UFB might be related to structural changes at the workforce level.
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The relationship between innovation and skill premium is analysed on a panel of 12 countries for a 16-year span (2000–2015). According to a Schumpeterian view, a non-linear relationship between innovation and skill premium is found showing a threshold effect that reverses the relationship for relatively high levels of innovative activity. Moreover, the relationships change from convex to concave when variables representing different types of innovative activity are considered. In fact, with R&D a positive relationship with skill premium reverses once a threshold is exceeded, while the opposite holds for patents, for which the relationship is initially negative and then becomes positive. We argue that this is due to the different degrees of appropriability of the knowledge produced by innovators with these activities. We then show how to exploit these different patterns to provide a truly innovation-based analysis of the patterns of skill premium for the United States, France, Germany and Great Britain.
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Bedrängt von strukturellem Wandel und neuen parteipolitischen Rivalen ringen sozialdemokratische Parteien in ganz Europa im 21. Jahrhundert um ein zukunftsfähiges Profil, das ihren historischen Anliegen des sozialen Ausgleichs und der Inklusion zu politischer Wirkung verhelfen kann. Auch in der Schweiz wird um die Ausrichtung der SP Schweiz gerungen und debattiert. Für diese Debatte liefert das Buch Antworten auf folgende Fragen: Wer wählt heute in der Schweiz die SP und warum? Wer nicht, oder nicht mehr? Für welches inhaltliche Profil steht die SP Schweiz? Wen spricht sie damit an? Wo liegt das strategische elektorale Potenzial der Schweizer Sozialdemokratie? Die Autorinnen und Autoren leisten einen empirisch fundierten, reich und anschaulich illustrierten Beitrag zu Stand und Perspektiven der Sozialdemokratie in der Schweiz. Sie kontextualisieren den «Schweizer Fall» im westeuropäischen Umfeld, beleuchten die Entwicklungen der SP Schweiz in den letzten Jahrzehnten und diskutieren Perspektiven für die zukünftige Formation und Ausrichtung der Partei.
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Algorithmic risk assessment tools are now commonplace in public sector domains such as criminal justice and human services. These tools are intended to aid decision makers in systematically using rich and complex data captured in administrative systems. In this study we investigate sources of heterogeneity in the alignment between worker decisions and algorithmic risk scores in the context of a real world child abuse hotline screening use case. Specifically, we focus on heterogeneity related to worker experience. We find that senior workers are far more likely to screen in referrals for investigation, even after we control for the observed algorithmic risk score and other case characteristics. We also observe that the decisions of less-experienced workers are more closely aligned with algorithmic risk scores than those of senior workers who had decision-making experience prior to the tool being introduced. While screening decisions vary across child race, we do not find evidence of racial differences in the relationship between worker experience and screening decisions. Our findings indicate that it is important for agencies and system designers to consider ways of preserving institutional knowledge when introducing algorithms into high employee turnover settings such as child welfare call screening.
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Notwithstanding major evolutions in both class identity and broader structural processes, generically defined “middle classes” are still a target for both investors seeking effective remuneration strategies and urban governments striving to achieve urban competitiveness as well as increased “social cohesion” and “order” in cities. However, despite this enduring centrality, scholars have yet to truly develop a critical discussion around the transformations involving middle classes' subjectivities within urban regeneration discourses and strategies and how they are shaped/adjusted/filtered through the specific forms that their design and implementation assume within particular contexts. We argue that a better grasp of these subjectivities can be critical for a deeper understanding of these strategies, their rationales, tools, outcomes, and shortcomings. The paper intends to fill this gap by investigating such subjectivities through the collection and discussion of “residential narratives”, by which we mean the collection of discourses and representations set forth by households and analyzed about a series of relevant dimensions: expectations, boundaries, and belonging. The narratives were collected in two European urban neighborhoods - one in Milan (Italy) and one in Marseille (France) - involved in variably governed urban regeneration processes centered on shaping and mobilizing middle-class subjectivities. Based on the presented results, the paper argues for a bottom-up institutionalist perspective on how we study urban regeneration discourses and strategies as class-making governing processes.
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In this paper, we examine how robot adoption and Chinese import competition shaped employment patterns in 352 cities across the United Kingdom. We find that cities whose initial industry composition exposed them to industrial robots and China’s integration into the world economy experienced significant employment declines. When pitched against other capital and technologies, the impact of robots remains distinct. Our findings suggest that one more robot per thousand workers reduced the employment-to-population ratio by 0.5 percentage points, while an increase of $1,000 imports from China per worker reduced the employment-to-population ratio by 0.11 percentage points. We also show that while these are sizable effects, penetration of both robots and Chinese imports are too small to account for Brexit.
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How does technological change affect social policy preferences across different institutional contexts? In this paper, we argue that individuals who perceive high levels of technology-related employment risks prefer passive policies like unemployment benefits over active measures like retraining in order to satisfy the need for immediate compensation in the case of job loss. At the same time, general support for passive (active) policy solutions to technological change should be significantly lower (higher) in countries where generous compensation schemes already exist. As the perception of technology-related employment risks increases, however, we expect that social policy preferences among high-risk individuals should converge across different welfare state contexts. We use novel data from a diverse set of 24 OECD countries that specifically measure preferred social policy solutions to technological change in a constrained choice scenario. Applying statistical methods that explicitly model the trade-off faced by individuals, we find evidence in line with our theoretical expectations.
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Digitalization is likely to have a lasting impact on work, welfare, health, education, and the income distribution. It will radically transform not only social risks but also the means by which these are addressed. The contributions to this volume explore how digitalization—in different forms—affects the welfare state. They study how it influences concrete social policies as well as the underlying power relationship between actors, i.e. the politics of the welfare state. The volume brings together internationally renowned welfare-state scholars to identify a) the socio-economic challenges resulting from rapid technological change; b) the ensuing political conflicts in the domain of welfare state reform broadly defined; and c) the ways in which these changes challenge and shape existing labour market and welfare state arrangements. Overall, the volume explains the potential and real political and policy responses to these challenges, grasps the contours of future developments, and reflects on whether the current wave of technological change might promote the emergence of a new paradigm of welfare state policy making. We adopt a forward-looking yet empirically-grounded perspective on the impact of digitalization on the welfare state. Based on this approach, the volume uniquely offers a theoretically informed empirical basis for social science and public debates about the long-term implications of the digital revolution for the welfare state, covering a broad range of policy areas such as education, pensions, labour market policies, tax policy, and health care.
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This paper analyzes a marked change in the evolution of the U.S. wage structure over the past fifteen years: divergent trends in upper-tail (90/50) and lower-tail (50/10) wage inequality. We document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years (since 1980). Wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987, but it has ceased growing (and for some measures actually narrowed) since the late 1980s. Furthermore we find that occupational employment growth shifted from monotonically increasing in wages (education) in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage (education) distribution in the 1990s. We characterize these patterns as the %u201Cpolarization%u201D of the U.S. labor market, with employment polarizing into high-wage and low-wage jobs at the expense of middle-wage work. We show how a model of computerization in which computers most strongly complement the non-routine (abstract) cognitive tasks of high-wage jobs, directly substitute for the routine tasks found in many traditional middle-wage jobs, and may have little direct impact on non-routine manual tasks in relatively low-wage jobs can help explain the observed polarization of the U.S. labor market.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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We estimate how offshoring and exporting affect wages by skill type. Our data match the population of Danish workers to the universe of private-sector Danish firms, whose trade flows are broken down by product and origin and destination countries. Our data reveal new stylized facts about offshoring activities at the firm level, and allow us to both condition our identification on within-job-spell changes and construct instruments for offshoring and exporting that are time varying and uncorrelated with the wage setting of the firm. We find that within job spells, (1) offshoring tends to increase the high-skilled wage and decrease the low-skilled wage; (2) exporting tends to increase the wages of all skill types; (3) the net wage effect of trade varies substantially across workers of the same skill type; and (4) conditional on skill, the wage effect of offshoring exhibits additional variation depending on task characteristics. We then track the outcomes for workers after a job spell and find that those displaced from offshoring firms suffer greater earnings losses than other displaced workers, and that low-skilled workers suffer greater and more persistent earnings losses than high-skilled workers.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
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Using the 2003 National Survey of College Graduates, I examine how immigrants perform relative to natives in activities likely to increase U.S. productivity, according to the type of visa on which they first entered the United States. Immigrants who first entered on a student/trainee visa or a temporary work visa have a large advantage over natives in wages, patenting, commercializing or licensing patents, and publishing. In general, this advantage is explained by immigrants' higher education and field of study, but this is not the case for publishing, and immigrants are more likely to start companies than natives with similar education. Immigrants without U.S. education and who arrived at older ages suffer a wage handicap, which offsets savings to the United States from their having completed more education abroad. Immigrants who entered with legal permanent residence do not outperform natives for any of the outcomes considered.
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OECD labor markets have become more “polarized” with employment in the middle of the skill distribution falling relative to the top and (in recent years) also the bottom of the skill distribution. We test the hypothesis of Autor, Levy, and Murnane (2003) that this is partly due to information and communication technologies (ICT) complementing the analytical tasks primarily performed by highly educated workers and substituting for routine tasks generally performed by middle educated workers (with little effect on low educated workers performing manual non-routine tasks). Using industry level data on the US, Japan, and nine European countries 1980-2004 we find evidence consistent with ICT-based polarization. Industries with faster growth of ICT had greater increases in relative demand for high educated workers and bigger falls in relative demand for middle educated workers. Trade openness is also associated with polarization, but this is not robust to controls for technology (like R&D). Technologies can account for up to a quarter of the growth in demand for the college educated in the quarter century since 1980.
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Empirical work has been limited in its ability to directly study whether skill requirements in the workplace have been rising and whether these changes have been related to technological change. This article answers these questions using a unique data set from West Germany that enabled me to look at how skill requirements have changed within occupations. I show that occupations require more complex skills today than in 1979 and that the changes in skill requirements have been most pronounced in rapidly computerizing occupations. Changes in occupational content account for about 36% of the recent educational upgrading in employment.
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A recent "revisionist" literature characterizes the pronounced rise in U.S. wage inequality since 1980 as an "episodic" event of the first half of the 1980s driven by nonmarket factors (particularly a falling real minimum wage) and concludes that continued increases in wage inequality since the late 1980s substantially reflect the mechanical confounding effects of changes in labor force composition. Analyzing data from the Current Population Survey for 1963 to 2005, we find limited support for these claims. The slowing of the growth of overall wage inequality in the 1990s hides a divergence in the paths of upper-tail (90/50) inequality-which has increased steadily since 1980, even adjusting for changes in labor force composition-and lower-tail (50/10) inequality, which rose sharply in the first half of the 1980s and plateaued or contracted thereafter. Fluctuations in the real minimum wage are not a plausible explanation for these trends since the bulk of inequality growth occurs above the median of the wage distribution. Models emphasizing rapid secular growth in the relative demand for skills-attributable to skill-biased technical change-and a sharp deceleration in the relative supply of college workers in the 1980s do an excellent job of capturing the evolution of the college/high school wage premium over four decades. But these models also imply a puzzling deceleration in relative demand growth for college workers in the early 1990s, also visible in a recent "polarization" of skill demands in which employment has expanded in high-wage and low-wage work at the expense of middle-wage jobs. These patterns are potentially reconciled by a modified version of the skill-biased technical change hypothesis that emphasizes the role of information technology in complementing abstract (high-education) tasks and substituting for routine (middle-education) tasks. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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This paper develops tools and techniques to study the impact of exogenous changes in factor supply and factor demand on factor allocation and factor prices in economies with a large number of goods and factors. The main results of our paper characterize sufficient conditions for robust monotone comparative statics predictions in a Roy-like assignment model. These general results are then used to generate new insights about the consequences of globalization.
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Census data show that since 1980 low-skill workers in the United States have been increasingly employed in the provision of non-tradeable time-intensive services - such as food preparation and cleaning - that can be broadly thought as substitutes of home production activities. Meanwhile the wage gap between this sector and the rest of the economy has shrunk. If skilled workers, with their high opportunity cost of time, demand more of these time-intensive services, then wage gains at the top of the wage distribution (such as those observed in the last three decades) are expected to raise the consumption of these services, consistent with these stylized facts. Using both consumption expenditure data and city-level data on employment and wages of workers of different skills, we provide several pieces of evidence in favor of these demand shifts, and we argue that they provide a viable explanation for the growth in wages at the bottom quantiles observed in the last fifteen years.
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We apply an understanding of what computers do to study how computerization alters job skill demands. We argue that computer capital (1) substitutes for workers in performing cognitive and manual tasks that can be accomplished by following explicit rules; and (2) complements workers in performing nonroutine problem-solving and complex communications tasks. Provided these tasks are imperfect substitutes, our model implies measurable changes in the composition of job tasks, which we explore using representative data on task input for 1960 to 1998. We find that within industries, occupations and education groups, computerization is associated with reduced labor input of routine manual and routine cognitive tasks and increased labor input of nonroutine cognitive tasks. Translating task shifts into education demand, the model can explain sixty percent of the estimated relative demand shift favoring college labor during 1970 to 1998. Task changes within nominally identical occupations account for almost half of this impact.
Article
I apply Ricardo’s principle of comparative advantage to a theory of factor substitutability in a model with a continuum of worker and job types. Highly skilled workers have a comparative advantage in complex jobs. The model satisfies the distance‐dependent elasticity of substitution (DIDES) characteristic: substitutability between types declines with their skill distance. I analyze changes in relative wages due to human capital accumulation. The concept of a complexity dispersion parameter or compression elasticity is introduced. Empirical studies suggest its value to be equal to two: a 1 percent increase in the stock of human capital reduces the Mincerian return by 2 percent.
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This paper reports on a household survey specially designed to measure what we call the “offshorability” of jobs, defined as the ability to perform the work duties from abroad. We develop multiple measures of offshorability, using both self-reporting and professional coders. All the measures find that roughly 25% of U.S. jobs are offshorable. Our three preferred measures agree between 70% and 80% of the time. Furthermore, professional coders appear to provide the most accurate assessments, which is good news because the Census Bureau could collect data on offshorability without adding a single question to the CPS. Empirically, more educated workers appear to hold somewhat more offshorable jobs, and offshorability does not have systematic effects on either wages or the probability of layoff. Perhaps most surprisingly, routine work is no more offshorable than other work.
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There is little doubt that technology has had the most profound effect on altering the tasks that we humans do in our jobs. Economists have long speculated on how technical change affects both the absolute demand for labour as a whole and the relative demands for different types of labour. In recent years, the idea of skill-biased technical change has become the consensus view about the current impact of technology on labour demand, namely that technical change leads to an increase in the demand for skilled relative to unskilled labour painting a bleak future for the employment prospects of less-skilled workers. But, drawing on a recent paper by Autor, Levy and Murnane (2003) about the impact of technology on the demand for different types of skills, this paper argues that the demand in the least-skilled jobs may be growing. But, it is argued that employment of the less-skilled is increasingly dependent on physical proximity to the more-skilled and may also be vulnerable in the long-run to further technological developments.
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This paper shows the employment structure of 16 European countries has been polarizing in recent years with the employment shares of managers, professionals and low-paid personal services workers increasing at the expense of the employment shares of middling manufacturing and routine office workers. To explain this job polarization, the paper develops and estimates a simple model to capture the effects of technology, globalization, institutions and product demand effects on the demand for different occupations. The results suggest that the routinization hypothesis of Autor, Levy and Murnane (2003) is the single most important factor behind the observed shifts in employment structure. We find some evidence for offshoring to explain job polarization although its impact is much smaller. We also find that shifts in product demand are acting to attenuate the polarizing impact of routinization and that differences or changes in wage-setting institutions play little role in explaining job polarization in Europe.
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This chapter presents a framework for understanding changes in the wage structure and overall earnings inequality. The framework emphasizes the role of supply and demand factors and the interaction of market forces and labor market institutions. Recent changes in the US wage structure are analyzed in detail to highlight crucial measurement issues that arise in studying wage structure changes and to illustrate the operation of the supply-demand-institution framework. The roles of skill-biased technological change, globalization forces, changes in demographics and relative skill supplies, industry labor rents, unions, and the minimum wage in the evolution of the US wage structure are examined. Recent wage structure changes are placed in a longer-term historical perspective, and differences and similarities in wage structure changes among OECD nations are assessed.
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A central organizing framework of the voluminous recent literature studying changes in the returns to skills and the evolution of earnings inequality is what we refer to as the canonical model, which elegantly and powerfully operationalizes the supply and demand for skills by assuming two distinct skill groups that perform two different and imperfectly substitutable tasks or produce two imperfectly substitutable goods. Technology is assumed to take a factor-augmenting form, which, by complementing either high or low skill workers, can generate skill biased demand shifts. In this paper, we argue that despite its notable successes, the canonical model is largely silent on a number of central empirical developments of the last three decades, including: (1) significant declines in real wages of low skill workers, particularly low skill males; (2) non-monotone changes in wages at different parts of the earnings distribution during different decades; (3) broad-based increases in employment in high skill and low skill occupations relative to middle skilled occupations (i.e., job 'polarization'); (4) rapid diffusion of new technologies that directly substitute capital for labor in tasks previously performed by moderately-skilled workers; and (5) expanding offshoring opportunities, enabled by technology, which allow foreign labor to substitute for domestic workers in specific tasks. Motivated by these patterns, we argue that it is valuable to consider a richer framework for analyzing how recent changes in the earnings and employment distribution in the United States and other advanced economies are shaped by the interactions among worker skills, job tasks, evolving technologies, and shifting trading opportunities. We propose a tractable task-based model in which the assignment of skills to tasks is endogenous and technical change may involve the substitution of machines for certain tasks previously performed by labor. We further consider how the evolution of technology in th
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This paper discusses a general equilibrium model of the assignment of heterogeneous workers to heterogeneous jobs. Both jobs and workers are measured along a continuous one-dimensional scale. The composition of labor supply is represented by a distribution function. Highly skilled workers have an absolute advantage in all jobs and a comparative advantage in complex jobs. Equilibrium is characterized by a mapping of skills on complexities. The model is able simultaneously to explain the remuneration of skill, the allocation of skills to jobs, and variations in labor demand per job type. Estimation results for the Netherlands offer support for its relevance. Copyright 1995 by University of Chicago Press.
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This paper shows that the United Kingdom since 1975 has exhibited a pattern of job polarization with rises in employment shares in the highest- and lowest-wage occupations. This is not entirely consistent with the idea of skill-biased technical change as a hypothesis about the impact of technology on the labor market. We argue that the "routinization" hypothesis recently proposed by Autor, Levy, and Murnane (2003) is a better explanation of job polarization, though other factors may also be important. We show that job polarization can explain one-third of the rise in the log(50/10) wage differential and one-half of the rise in the log(90/50). Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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A simple supply and demand framework is used to analyze changes in the U. S. wage structure from 1963 to 1987. Rapid secular growth in the demand for more-educated workers, “more-skilled” workers, and females appears to be the driving force behind observed changes in the wage structure. Measured changes in the allocation of labor between industries and occupations strongly favored college graduates and females throughout the period. Movements in the college wage premium over this period appear to be strongly related to fluctuations in the rate of growth of the supply of college graduates.
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We propose a theory of the global production process that focuses on tradeable tasks, and use it to study how falling costs of offshoring affect factor prices in the source country. We identify a productivity effect of task trade that benefits the factor whose tasks are more easily moved offshore. In the light of this effect, reductions in the cost of trading tasks can generate shared gains for all domestic factors, in contrast to the distributional conflict that typically results from reductions in the cost of trading goods. (JEL F11, F16)