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Routine-biased technological change and wages by education level: Occupational downgrading and displacement effects

Author

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  • Elliot Moiteaux
  • Clément Bosquet
  • Paul Maarek

    (Université de Cergy-Pontoise, THEMA)

Abstract

Taking advantage of geographic (and time) variation in the proportion of routine occupations in the US, we study the impact of this variation on the wage rate of workers by educational group. Using individual data and a Bartik-type IV strategy, we show that not only non-college-educated workers but also, in the same proportion, workers with fewer than four years of college are negatively impacted by this routine- biased technological change. The latter skill group currently represents 30% of the US population. We show that only 10% to 20% of the impact on both educational groups is related to occupational and industrial downgrading (the composition eect) and that most of the wage impact occurs within industries and occupations, including manual service occupations. This is consistent with the displacement effect described in the theoretical literature on task-biased technological change and automation.

Suggested Citation

  • Elliot Moiteaux & Clément Bosquet & Paul Maarek, 2021. "Routine-biased technological change and wages by education level: Occupational downgrading and displacement effects," THEMA Working Papers 2021-05, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2021-05
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    References listed on IDEAS

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    More about this item

    Keywords

    job polarization; routine occupations; wages; education;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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