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Training Requirements, Automation, and Job Polarisation

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  • Andy Feng
  • Georg Graetz

Abstract

We analyse how job training requirements interact with engineering complexity in shaping firms’ automation decisions. A model that distinguishes between a task’s engineering complexity and its training requirements predicts that when two tasks are equally complex, firms automate the task that requires more training. Under plausible conditions this leads to job polarisation, and in particular to polarisation of employment by initial training requirements. US data provide empirical support for the model’s implications. Training requirements and a measure of engineering complexity account for much of US job polarisation from 1980 to 2008.

Suggested Citation

  • Andy Feng & Georg Graetz, 2020. "Training Requirements, Automation, and Job Polarisation," The Economic Journal, Royal Economic Society, vol. 130(631), pages 2249-2271.
    • Handle: RePEc:oup:econjl:v:130:y:2020:i:631:p:2249-2271.
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    File URL: http://hdl.handle.net/10.1093/ej/ueaa044
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    Cited by:

    1. Brunello, Giorgio & Rückert, Désirée & Weiss, Christoph & Wruuck, Patricia, 2023. "Advanced digital technologies and investment in employee training: Complements or substitutes?," EIB Working Papers 2023/01, European Investment Bank (EIB).
    2. Uwe Blien & Oliver Ludewig & Anja Rossen, 2023. "Contradictory effects of technological change across developed countries," Review of International Economics, Wiley Blackwell, vol. 31(2), pages 580-608, May.
    3. Derick Almeida & Tiago Neves Sequeira, 2023. "Fertility choices, Demographics and Automation," CeBER Working Papers 2023-05, Centre for Business and Economics Research (CeBER), University of Coimbra.
    4. Hensvik, Lena & Skans, Oskar Nordström, 2023. "The skill-specific impact of past and projected occupational decline," Labour Economics, Elsevier, vol. 81(C).
    5. Oscar Afonso & Tiago Sequeira & Derick Almeida, 2023. "Technological knowledge and wages: from skill premium to wage polarization," Journal of Economics, Springer, vol. 140(2), pages 93-119, October.

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