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Complex-Task Biased Technological Change and the Labor Market

Listed author(s):
  • Colin Caines

    (Federal Reserve Board)

  • Florian Hoffmann

    (University of British Columbia)

  • Gueorgui Kambourov

    (University of Toronto)

In this paper we study the relationship between task complexity and the occupational wage- and employment structure. Complex tasks are defined as those requiring higher-order skills, such as the ability to abstract, solve problems, make decisions, or communicate effectively. We measure the task complexity of an occupation by performing Principal Component Analysis on a broad set of occupational descriptors in the Occupational Information Network (O*NET) data. We establish four main empirical facts for the U.S. over the 1980-2005 time period that are robust to the inclusion of a detailed set of controls, subsamples, and levels of aggregation: (1) There is a positive relationship across occupations between task complexity and wages and wage growth; (2) Conditional on task complexity, routine-intensity of an occupation is not a significant predictor of wage growth and wage levels; (3) Labor has reallocated from less complex to more complex occupations over time; (4) Within groups of occupations with similar task complexity labor has reallocated to non-routine occupations over time. We then formulate a model of Complex-Task Biased Technological Change with heterogeneous skills and show analytically that it can rationalize these facts. We conclude that workers in non-routine occupations with low ability of solving complex tasks are not shielded from the labor market effects of automatization. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1016/j.red.2017.01.008
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 25 (2017)
Issue (Month): (April)
Pages: 298-319

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Handle: RePEc:red:issued:16-100
DOI: 10.1016/j.red.2017.01.008
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References listed on IDEAS
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  1. Lawrence F. Katz, 2014. "America's Jobs Challenges and the Continuing Role of the U.S. Department of Labor," ILR Review, Cornell University, ILR School, vol. 67(3_suppl), pages 578-583, May.
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  3. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Specificity Of Human Capital," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 63-115, 02.
  4. Marigee P. Bacolod & Bernardo S. Blum, 2010. "Two Sides of the Same Coin: U.S. "Residual" Inequality and the Gender Gap," Journal of Human Resources, University of Wisconsin Press, vol. 45(1).
  5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  6. Firpo, Sergio & Fortin, Nicole M. & Lemieux, Thomas, 2011. "Occupational Tasks and Changes in the Wage Structure," IZA Discussion Papers 5542, Institute for the Study of Labor (IZA).
  7. 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.
  8. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
  9. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
  10. Ross, Matthew, 2014. "Skill Biased Technical Change: Wage Effects from a Panel of Occupational Task Measures," MPRA Paper 63732, University Library of Munich, Germany, revised 18 Apr 2015.
  11. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 843-881.
  12. Shintaro Yamaguchi, 2012. "Tasks and Heterogeneous Human Capital," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 1-53.
  13. David J. Deming, 2015. "The Growing Importance of Social Skills in the Labor Market," NBER Working Papers 21473, National Bureau of Economic Research, Inc.
  14. Gueorgui Kambourov & Iourii Manovskii, 2008. "Rising Occupational And Industry Mobility In The United States: 1968-97," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 41-79, 02.
  15. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Mobility and Wage Inequality," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 731-759.
  16. repec:sae:ilrrev:v:67:y:2014:i:2.5:p:578-583 is not listed on IDEAS
  17. Goos, Maarten & Manning, Alan & Salomons, Anna, 2014. "Explaining job polarization: routine-biased technological change and offshoring," LSE Research Online Documents on Economics 59698, London School of Economics and Political Science, LSE Library.
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