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Upstairs, Downstairs: Computer-Skill Complementarity and Computer-Labor Substitution on Two Floors of a Large Bank

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  • David H. Autor
  • Frank Levy
  • Richard Murnane

Abstract

We describe how a single technological innovation, the introduction of image processing of checks, led to distinctly different changes in the structure of jobs in two departments of a large bank overseen by one group of managers. In the downstairs deposit processing department, image processing led to the substitution of computers for high school educated labor in accomplishing core tasks and in greater specialization in the jobs that remained. In the upstairs exceptions processing department, image processing led to the integration of tasks, with an associated increase in the demand for particular skills. The case illustrates the interdependence of technological change and organizational change. It suggests that seeing the whole picture' and associated conceptual and problem-solving skills are made more valuable by information technologies. Finally, it underscores that the short-term consequences of technological changes may depend importantly on regulatory forces.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7890.

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Date of creation: Sep 2000
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Handle: RePEc:nbr:nberwo:7890

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References

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  1. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," NBER Working Papers 5956, National Bureau of Economic Research, Inc.
  2. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation for Research in Economics, Yale University.
  3. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.
  4. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
  5. Lindbeck, Assar & Snower, Dennis J., 1999. "Multi-Task Learning and the Reorganization of Work. From Tayloristic to Holistic Organization," IZA Discussion Papers 39, Institute for the Study of Labor (IZA).
  6. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  7. Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, vol. 89(1), pages 78-102, March.
  8. David Autor & Frank Levy & Richard Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  9. Berman, Eli & Bound, John & Machin, Stephen, 1997. "Implications of Skill-Biased Technological Change: International Evidence," Working Paper Series 486, Research Institute of Industrial Economics.
  10. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
  11. Caroli, Eve & Van Reenen, John, 1999. "Skill biased organizational change? Evidence from a panel of British and French establishments," CEPREMAP Working Papers (Couverture Orange) 9917, CEPREMAP.
  12. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August.
  13. Eli Berman & John Bound & Zvi Griliches, 1994. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Cindy Zoghi & Sabrina Wulff Pabilonia, 2007. "Which workers gain upon adopting a computer?," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 423-444, May.
  2. Chris N. Sakellariou & Harry A. Patrinos, 2004. "Technology, computers and wages: evidence from a developing economy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 47(3-4), pages 543.
  3. David H. Autor, 2001. "Wiring the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 25-40, Winter.
  4. Sabrina Wulff Pabilonia & Cindy Zoghi, 2004. "Which Workers Gain from Computer Use?," Working Papers 373, U.S. Bureau of Labor Statistics.
  5. Richard B. Freeman, 2002. "The labour market in the new information economy," LSE Research Online Documents on Economics 20062, London School of Economics and Political Science, LSE Library.
  6. repec:dgr:umaror:2001005 is not listed on IDEAS
  7. Ann Bartel & Richard Freeman & Casey Ichniowski & Morris M. Kleiner, 2003. "Can a Work Organization Have an Attitude Problem? The Impact of Workplaces on Employee Attitudes and Economic Outcomes," NBER Working Papers 9987, National Bureau of Economic Research, Inc.
  8. repec:dgr:umamer:2001019 is not listed on IDEAS
  9. Levenson, Alec & Zoghi, Cindy, 2007. "The Strength of Occupation Indicators as a Proxy for Skill," Working Papers 404, U.S. Bureau of Labor Statistics.
  10. Carlsson, Bo, 2004. "The Digital Economy: what is new and what is not?," Structural Change and Economic Dynamics, Elsevier, vol. 15(3), pages 245-264, September.
  11. repec:dgr:umaror:2001004 is not listed on IDEAS
  12. Ganna Vakhitova & Christopher R. Bollinger, 2011. "Labor Market Return to Computer Skills: Using Microsoft Certification to Measure Computer Skills," Discussion Papers 46, Kyiv School of Economics.
  13. Richard B. Freeman, 2002. "The Labour Market in the New Information Economy," NBER Working Papers 9254, National Bureau of Economic Research, Inc.
  14. Edward N. Wolff, 2005. "Computerization and Rising Unemployment Duration," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 507-536, Fall.
  15. Luca Casolaro & Giorgio Gobbi, 2004. "Information technology and productivity changes in the Italian banking industry," Temi di discussione (Economic working papers) 489, Bank of Italy, Economic Research and International Relations Area.

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