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Individual consequences of occupational decline

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  • Per-Anders Edin
  • Tiernan Evans
  • Georg Graetz
  • Sofia Hernnäs
  • Guy Michaels

Abstract

What are the earnings and employment losses that workers suffer when demand for their occupations declines? To answer this question we combine forecasts on occupational employment changes, which allow us to identify unanticipated declines; administrative data on the population of Swedish workers, spanning several decades; and a highly detailed occupational classification. We find that, compared to similar workers, those facing occupational decline lost about 2-5 percent of mean cumulative earnings from 1986-2013. But workers at the bottom of their occupations' initial earnings distributions suffered considerably larger losses. These earnings losses are partly accounted for by reduced employment, and increased unemployment and retraining.

Suggested Citation

  • Per-Anders Edin & Tiernan Evans & Georg Graetz & Sofia Hernnäs & Guy Michaels, 2019. "Individual consequences of occupational decline," CEP Discussion Papers dp1629, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1629
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    Cited by:

    1. Blien, Uwe & Dauth, Wolfgang & Roth, Duncan H.W., 2021. "Occupational routine intensity and the costs of job loss: evidence from mass layoffs," Labour Economics, Elsevier, vol. 68(C).
    2. Gardberg, Malin & Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2020. "Digitization-based automation and occupational dynamics," Economics Letters, Elsevier, vol. 189(C).
    3. Georg Graetz, 2019. "Labor Demand in the Past, Present, and Future," European Economy - Discussion Papers 114, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    4. Lewandowski, Piotr & Keister, Roma & Hardy, Wojciech & Górka, Szymon, 2020. "Ageing of routine jobs in Europe," Economic Systems, Elsevier, vol. 44(4).
    5. Boddin, Dominik & Kroeger, Thilo, 2021. "Structural change revisited: The rise of manufacturing jobs in the service sector," Discussion Papers 38/2021, Deutsche Bundesbank.
    6. Grigoli, Francesco & Koczan, Zsoka & Topalova, Petia, 2020. "Automation and labor force participation in advanced economies: Macro and micro evidence," European Economic Review, Elsevier, vol. 126(C).
    7. Graetz, Georg, 2020. "Technological change and the Swedish labor market," Working Paper Series 2020:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2021. "Automation, Work and Productivity: The Role of Firm Heterogeneity," Working Paper Series 1382, Research Institute of Industrial Economics, revised 09 Mar 2023.

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    More about this item

    Keywords

    technological change; occupations; inequality;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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