Disappearing Stepping Stones: Technological Change and Career Paths

Which career paths lead workers towards high-skilled non-routine cognitive occupations? Using PSID data, we show that, for a significant share of workers, a career path towards non-routine cognitive occupations goes through middle-skilled routine occupations, with the majority going through a subset of routine cognitive occupations. We then argue that the decline in employment in routine cognitive occupations due to routine-biased technological change can negatively affect the chances of younger cohorts joining high-skilled occupations. To test this hypothesis, we develop a structural occupational choice model that endogenously generates realistic career paths and estimate it using PSID data and job ad data from three major US outlets covering the period from 1940 to 2000. Our estimations suggest that, on average, 6% of workers ending up in non-routine cognitive occupations use routine cognitive occupations as stepping stones that allow them to maintain and accumulate human capital and experience relevant for later employment in high-skilled occupations. A fall in employment opportunities in routine cognitive occupations over the period of the most intensive routine-biased technological change led to at least 1.37 million lost high-skilled workers who got stuck in less skilled occupations.