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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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Publication status: published as Autor, David, Frank Levy and Richard J. Murnane. "Upstairs, Downstairs: Computers And Skills On Two Floors Of A Large Bank," International Labor Relations Review, 2002, v55(3,Apr), 432-447.
Handle: RePEc:nbr:nberwo:7890

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  1. E Berman & J Bound & Stephen Machin, 1997. "Implications of Skill-Biased Technological Change: International Evidence," CEP Discussion Papers, Centre for Economic Performance, LSE dp0367, Centre for Economic Performance, LSE.
  2. 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, MIT Press, vol. 118(4), pages 1279-1333, November.
  3. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(4), pages 1169-1213, November.
  4. Eli Berman & John Bound & Zvi Griliches, 1993. "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.
  5. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
  6. Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(4), pages 1215-1244, November.
  7. Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, American Economic Association, vol. 89(1), pages 78-102, March.
  8. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(3), pages 693-732, August.
  9. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
  10. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 189, Cowles Foundation for Research in Economics, Yale University.
  11. 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).
  12. 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.
  13. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 13(3), pages 827-46, September.
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Cited by:
  1. Richard B. Freeman, 2002. "The Labour Market in the New Information Economy," NBER Working Papers 9254, National Bureau of Economic Research, Inc.
  2. David Autor, 2000. "Wiring the Labor Market," NBER Working Papers 7959, National Bureau of Economic Research, Inc.
  3. Sabrina Wulff Pabilonia & Cindy Zoghi, 2004. "Which Workers Gain from Computer Use?," Working Papers, U.S. Bureau of Labor Statistics 373, U.S. Bureau of Labor Statistics.
  4. Borghans,Lex & Weel,Bas,ter, 2001. "Computers, Skills and Wages," Research Memorandum, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT) 019, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  5. Ann Bartel & Casey Ichniowski & Morris Kleiner & Richard B. Freeman, 2004. "Can a work organization have an attitude problem? The impact of workplaces on employee attitude and economic outcomes," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 19953, London School of Economics and Political Science, LSE Library.
  6. Levenson, Alec & Zoghi, Cindy, 2007. "The Strength of Occupation Indicators as a Proxy for Skill," Working Papers, U.S. Bureau of Labor Statistics 404, U.S. Bureau of Labor Statistics.
  7. Cindy Zoghi & Sabrina Wulff Pabilonia, 2006. "Which Workers Gain Upon Adopting a Computer?," Working Papers, U.S. Bureau of Labor Statistics 395, U.S. Bureau of Labor Statistics.
  8. Chris N. Sakellariou & Harry A. Patrinos, 2004. "Technology, computers and wages: evidence from a developing economy," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, ULB -- Universite Libre de Bruxelles, vol. 47(3-4), pages 543.
  9. Carlsson, Bo, 2004. "The Digital Economy: what is new and what is not?," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 15(3), pages 245-264, September.
  10. Luca Casolaro & Giorgio Gobbi, 2004. "Information technology and productivity changes in the Italian banking industry," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 489, Bank of Italy, Economic Research and International Relations Area.
  11. Edward N. Wolff, 2005. "Computerization and Rising Unemployment Duration," Eastern Economic Journal, Eastern Economic Association, Eastern Economic Association, vol. 31(4), pages 507-536, Fall.
  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.

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