Disappearing routine jobs: Who,how, and why? |
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| Institution: | 1. Department of Economics, York University, 4700 Keele Street, Toronto, ON M3J 1P3, Canada;2. Rimini Centre for Economic Analysis, 75 University Ave. W., Waterloo, ON N2L 3C5, Canada;3. University of Zurich, Department of Economics, Schönberggasse 1, CH-8001 Zürich, Switzerland;4. National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138, USA;5. Vancouver School of Economics, University of British Columbia, 6000 Iona Drive, Vancouver, BC V6T1L4, Canada;1. University of California, Berkeley, CA 94720-3880, USA;2. Columbia University, 420 W. 118 St. MC 3308, New York 10027, NY, USA;3. National Bureau of Economic Research, 1050 Massachusetts Avenue, Cambridge, MA 02138-5398, USA;1. Columbia University, USA;2. University of Maryland, USA;3. Department of Economics, Columbia University, 420 W. 118th Street, New York, NY 10027, 212-854-1094, USA;1. International Monetary Fund, United States;2. Department of Economics, Wylie Hall, Indiana University, Bloomington, IN, 47405, United States;1. Yorkville University: 2000 Steeles Avenue West, Concord, Ontario, L4K 4N1, Canada;2. York University: 4700 Keele Street, Toronto, Ontario, M3J 1P3, Canada;3. IZA: Schaumburg-Lippe-Straße 5-9, 53113 Bonn, Germany |
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| Abstract: | We study the deterioration of employment in middle-wage, routine occupations in the United States in the last 35 years. The decline is primarily driven by changes in the propensity to work in routine jobs for individuals from a small set of demographic groups. These same groups account for a substantial fraction of both the increase in non-employment and employment in low-wage, non-routine manual occupations observed during the same period. We analyze a general neoclassical model of the labor market featuring endogenous participation and occupation choice. In response to an increase in automation technology, the framework embodies a tradeoff between reallocating employment across occupations and reallocation of workers towards non-employment. Quantitatively, we find that this standard model accounts for a relatively small portion of the joint decline in routine employment and associated rise in non-routine manual employment and non-employment. |
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