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Automation

Paper Session

Friday, Jan. 5, 2018 10:15 AM - 12:15 PM

Pennsylvania Convention Center, 105-A
Hosted By: American Economic Association
  • Chair: Pascual Restrepo, Boston University

Automation and Job Polarization: On the Decline of Middling Occupations in Europe

Vahagn Jerbashian
,
University of Barcelona

Abstract

Using data from 10 Western European countries, I provide evidence that the fall in prices of information technologies (IT) is associated with a lower share of employment in middle wage occupations and a higher share of employment in high wage occupations. The decline in IT prices has no robust effect on the share of employment in the lowest paid occupations. Similar results hold within gender and age groups, with notable differences in these groups. For instance, the share of employment in high wage occupations among males has increased less than among females with the fall in IT prices. A rationale for such a result is that men are more productive in medium wage occupations than females because of hard motor skills (brawn).

Determinants of the Wage Share: Evidence From Firm-level Data

Alexander Guschanski
,
University of Greenwich
Ozlem Onaran Prof
,
University of Greenwich

Abstract

There has been a significant decline in the share of wages in GDP at the macro level in both developed and developing countries since the 1980s. This paper analyses the causes of the falling wage share using firm-level data.
We compile a comprehensive dataset of 56 countries for the period of 1995-2015 using data provided by Thomson Reuters based on companies’ balance sheets and annual reports. The first novelty of this paper is to present a general model of determination of income distribution synthesising different strands in the literature to account for the fall in the wage share: the effect of skill-biased technological change (Autor, Katz and Krueger, 1998), globalisation (Böckerman and Maliranta, 2012), changes in industrial relations and labour market institutions (Stockhammer, 2015; Kristal, 2010; EC, 2007), and corporate governance (Lazonick and O’Sullivan, 2000). To the best of our knowledge, this is the first paper to analyse the impact of shareholder value orientation on firm level income distribution, which we capture by three variables: financial income and payments in non-financial corporations, and the link between CEO's compensation and shareholder return. With respect to industrial relations, we use previously unexplored firm-level data on labour disputes and collective bargaining coverage. By using firm-level data, we go beyond the fallacy of aggregation, which arise due to the use of macro or sectoral data, as in the majority of the previous literature. We test whether the decline in the wage share is linked to market concentration and mainly driven by ‘superstar-firms’ as argued by Autor, et al., (2017), and furthermore we account for the impact of remuneration of CEOs on the labour share. Finally, we provide country specific estimations for a large set of countries, and analyse the change in the impact of different variables in a variety of institutional settings.

Routine and Ageing? The Intergenerational Divide In The Deroutinisation Of Jobs In Europe

Piotr Lewandowski
,
Institute for Structural Research (IBS)
Roma Keister
,
Institute for Structural Research (IBS)
Wojciech Hardy
,
Institute for Structural Research (IBS)
Szymon Górka
,
Institute for Structural Research (IBS)

Abstract

The shift away from routine work and toward non-routine work (“deroutinisation”) is one of the critical changes on labour markets around the world. Routine-biased technical change and offshoring are often identified as the factors behind it. The age & cohort dimension of deroutinisation has so far been overlooked, except for Autor & Dorn (2009) for the US. We wish to address this gap, and aim to answer two sets of questions. 1) Has the task content of jobs evolved differently among younger and older workers in Europe? Have workers in routine-intensive occupations been getting younger or older on average than other workers? 2) Since routine work is susceptible to automation, how has the relationship between the routine task intensity and the unemployment risk changed over time?
We study 12 European countries (Austria, Belgium, Czechia, Denmark, Estonia, Germany, Greece, Hungary, Poland, Spain, Sweden, and the United Kingdom) between 1998 and 2014. We combine O*NET occupation content data and EU-LFS individual data, and follow Acemoglu & Autor (2011) in distinguishing between five task contents: non-routine cognitive analytical, non-routine cognitive interpersonal, routine cognitive, routine manual, and non-routine manual physical.
We find that the shift away from routine work and toward non-routine work occurred much faster among workers aged between 25 and 44 than among younger workers and older workers. We find that in the majority of countries, the ageing of the workforce occurred more quickly in occupations that were initially more routine-intensive, as the share of older workers in these occupations was rising. We estimate logit models that show that individuals in these occupations were increasingly likely to be unemployed, especially if they were between the ages of 15 and 34.

Benign Effects of Automation: New Evidence From Patent Texts

Lukas Puettmann
,
University of Bonn
Katja Mann
,
University of Bonn

Abstract

We provide a new measure of automation based on patents and study its employment effects. Classifying all U.S. patents granted between 1976 and 2014 as automation or non-automation patents, we document a rise in the share of automation patents from 25 percent to 67 percent. We link patents to the industries of their use and, through local industry structure, to commuting zones. According to our estimates, advances in national automation technology have a positive influence on employment in local labor markets. Manufacturing employment declines, but this is more than compensated by service sector job growth. Commuting zones with more people working in routine occupations fare worse.

The Evolving U.S. Occupational Structure

Enghin Atalay
,
University of Wisconsin-Madison
Phai Phongthiengtham
,
University of Wisconsin-Madison
Sebastian Sotelo
,
University of Michigan-Ann Arbor
Daniel Tannenbaum
,
University of Nebraska-Lincoln

Abstract

Using the text from job ads, we construct a new data set of occupational content from
1960 to 2000. We document that within-occupation task content shifts are at least as
important as employment shifts across occupations in accounting for the aggregate decline
of routine tasks. Motivated by these patterns, we first apply our new task measures to a
reduced-form statistical decomposition. We then embed our measures in an equilibrium
model of occupational choice. These two exercises indicate that shifts in the relative
demand for tasks account for much of the increase in 90-10 earnings inequality observed
over our sample period.
JEL Classifications
  • J2 - Demand and Supply of Labor