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Is Modern Technology Responsible for Jobless Recoveries?

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  • Georg Graetz
  • Guy Michaels

Abstract

Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. We investigate whether a similar problem afflicts other developed economies, and whether technology is a culprit. We study recoveries from 71 recessions in 28 industries and 17 countries from 1970-2011. We find that though GDP recovered more slowly after recent recessions, employment did not. Industries that used more routine tasks, and those more exposed to robotization, did not recently experience slower employment recoveries. Finally, middle-skill employment did not recover more slowly after recent recessions, and this pattern was no different in routine-intensive industries.

Suggested Citation

  • Georg Graetz & Guy Michaels, 2017. "Is Modern Technology Responsible for Jobless Recoveries?," American Economic Review, American Economic Association, vol. 107(5), pages 168-173, May.
  • Handle: RePEc:aea:aecrev:v:107:y:2017:i:5:p:168-73
    Note: DOI: 10.1257/aer.p20171100
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    References listed on IDEAS

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    1. Georg Graetz & Guy Michaels, 2017. "Is Modern Technology Responsible for Jobless Recoveries?," American Economic Review, American Economic Association, vol. 107(5), pages 168-173, May.
    2. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2012. "Americans Do IT Better: US Multinationals and the Productivity Miracle," American Economic Review, American Economic Association, vol. 102(1), pages 167-201, February.
    3. Gary Solon & Ryan Michaels & Michael W. L. Elsby, 2009. "The Ins and Outs of Cyclical Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 84-110, January.
    4. Jordi Galí & Frank Smets & Rafael Wouters, 2012. "Slow Recoveries: A Structural Interpretation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 9-30, December.
    5. Kurt Mitman & Stanislav Rabinovich, 2014. "Unemployment Benefit Extensions Caused Jobless Recoveries!?," PIER Working Paper Archive 14-013, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    6. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    7. Brad Hershbein & Lisa B. Kahn, 2018. "Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings," American Economic Review, American Economic Association, vol. 108(7), pages 1737-1772, July.
    8. Guy Michaels & Ashwini Natraj & John Van Reenen, 2014. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over Twenty-Five Years," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 60-77, March.
    9. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    10. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
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    15. 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.
    16. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
    17. Brewer Mike & Crossley Thomas F. & Joyce Robert, 2018. "Inference with Difference-in-Differences Revisited," Journal of Econometric Methods, De Gruyter, vol. 7(1), pages 1-16, January.
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    Citations

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    Cited by:

    1. Teresa C. Fort & Justin R. Pierce & Peter K. Schott, 2018. "New Perspectives on the Decline of US Manufacturing Employment," Journal of Economic Perspectives, American Economic Association, vol. 32(2), pages 47-72, Spring.
    2. Dauth, Wolfgang & Findeisen, Sebastian & Südekum, Jens & Wößner, Nicole, 2017. "German robots - the impact of industrial robots on workers," IAB Discussion Paper 201730, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. McGuinness, Seamus & Pouliakas, Konstantinos & Redmond, Paul, 2019. "Skills-Displacing Technological Change and Its Impact on Jobs: Challenging Technological Alarmism?," IZA Discussion Papers 12541, Institute of Labor Economics (IZA).
    4. Georg Graetz & Guy Michaels, 2017. "Is Modern Technology Responsible for Jobless Recoveries?," American Economic Review, American Economic Association, vol. 107(5), pages 168-173, May.
    5. repec:ris:sphecs:0289 is not listed on IDEAS
    6. Heijs, Joost & Arenas Díaz, Guillermo & Vergara Reyes, Delia Margarita, 2019. "Impact of innovation on employment in quantitative terms: review of empirical literature based on microdata," MPRA Paper 95326, University Library of Munich, Germany.
    7. Ndubuisi, Gideon & Avenyo, Elvis, 2018. "Estimating the effects of robotization on exports," MERIT Working Papers 046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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