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We Can Work It Out: the Impact of Technological Change on the Demand for Low Skill Workers

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  • Alan Manning
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    Abstract

    There is little doubt that technology has had the most profound effect on altering the tasks that wehumans do in our jobs. Economists have long speculated on how technical change affects boththe 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 aboutthe current impact of technology on labour demand, namely that technical change leads to anincrease in the demand for skilled relative to unskilled labour painting a bleak future for theemployment prospects of less-skilled workers. But, drawing on a recent paper by Autor, Levyand 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 thatemployment of the less-skilled is increasingly dependent on physical proximity to the moreskilledand may also be vulnerable in the long-run to further technological developments.

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    Bibliographic Info

    Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0640.

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    Date of creation: Jun 2004
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    Handle: RePEc:cep:cepdps:dp0640

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    Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

    Related research

    Keywords: Labor Demand and Technology; Inequality;

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    1. Teulings, Coen & Koopmanschap, Marc, 1989. "An econometric model of crowding out of lower education levels," European Economic Review, Elsevier, vol. 33(8), pages 1653-1664, October.
    2. Gautier, P.A. & Berg, G. van den & Ours, J.C. van & Ridder, G., 2002. "Worker turnover at the firm level and crowding out of lower educated workers," Open Access publications from Tilburg University urn:nbn:nl:ui:12-91480, Tilburg University.
    3. Sen, Amartya, 1983. "Poverty and Famines: An Essay on Entitlement and Deprivation," OUP Catalogue, Oxford University Press, number 9780198284635, September.
    4. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
    5. Enrico Moretti, 2003. "Human Capital Externalities in Cities," NBER Working Papers 9641, National Bureau of Economic Research, Inc.
    6. Acemoglu, Daron, 2002. "Directed Technical Change," Review of Economic Studies, Wiley Blackwell, vol. 69(4), pages 781-809, October.
    7. Ciccone, Antonio & Peri, Giovanni, 2002. "Identifying Human Capital Externalities: Theory with an Application to US Cities," IZA Discussion Papers 488, Institute for the Study of Labor (IZA).
    8. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    9. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    10. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
    11. Leontief, Wassily & Duchin, Faye, 1986. "The Future Impact of Automation on Workers," OUP Catalogue, Oxford University Press, number 9780195036237, September.
    12. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
    13. Paul Gregg & Stephen Machin & Alan Manning, 2004. "Mobility and Joblessness," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 371-410 National Bureau of Economic Research, Inc.
    14. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
    15. Enrico Moretti, 2002. "Human Capital Spillovers in Manufacturing: Evidence from Plant-Level Production Functions," Working Papers 02-27, Center for Economic Studies, U.S. Census Bureau.
    16. van Ours, J. C. & Ridder, G., 1995. "Job matching and job competition: Are lower educated workers at the back of job queues?," European Economic Review, Elsevier, vol. 39(9), pages 1717-1731, December.
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    Cited by:
    1. Jaewon Jung & Jean Mercenier, 2010. "Routinization-Biased Technical Change, Globalization and Labor Market Polarization: Does Theory Fit the Facts?," Working Papers halshs-00856105, HAL.
    2. David Autor & David Dorn, 2009. "This Job Is "Getting Old": Measuring Changes in Job Opportunities Using Occupational Age Structure," American Economic Review, American Economic Association, vol. 99(2), pages 45-51, May.
    3. Klara Brozovicova & Brian Fabo & Martin Kahanec & Vera Messing, 2013. "Overview of the Labour Market Situation of Low-Educated and Roma Population and Regulations Affecting Their Employment," Research Reports 4, Central European Labour Studies Institute (CELSI).
    4. Eva Moreno - Galbis & Thepthida Sopraseuth, 2013. "Job Polarization in Aging Economies," THEMA Working Papers 2013-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    5. Martina Bisello, 2013. "Job polarization in Britain from a task-based perspective.Evidence from the UK Skills Surveys," Discussion Papers 2013/160, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    6. Ana María Díaz, 2013. "The Employment Advantages of Skilled Urban Municipalities in Colombia," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE.
    7. Kaplanis, Ioannis, 2011. "Wage effects from changes in local human capital in Britain," Working Papers 2072/179614, Universitat Rovira i Virgili, Department of Economics.
    8. Autor, David & Dorn, David, 2012. "The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market," IZA Discussion Papers 7068, Institute for the Study of Labor (IZA).
    9. Ana Maria DIAZ ESCOBAR, 2011. "The Employment Advantages of Skilled Urban Areas," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    10. Hatsor, Limor, 2012. "Occupational choice: Teacher quality versus teacher quantity," Labour Economics, Elsevier, vol. 19(4), pages 608-623.
    11. Petri, Böckerman & Seppo, Laaksonen & Jari, Vainiomäki, 2013. "Is there job polarization at the firm level?," MPRA Paper 50833, University Library of Munich, Germany.
    12. Michelle Rendall & Franziska J. Weiss, 2014. "Employment polarization and the role of the apprenticeship system," ECON - Working Papers 141, Department of Economics - University of Zurich.
    13. Henseke, Golo & Tivig, Thusnelda, 2013. "Alterung in Berufen: Der Beitrag ökonomischer Einflüsse," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80001, Verein für Socialpolitik / German Economic Association.

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