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Routine-biased technological change and wages by education level: Occupational downgrading and displacement effects

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  • Clément Bosquet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Paul Maarek

    (LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - UP2 - Université Panthéon-Assas - SU - Sorbonne Université)

  • Elliot Moiteaux

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

Taking advantage of geographic (and time) variation in the proportion of routine occupations in the US, we study the impact of this variation on the wage rate of workers by educational group. Using individual data and a Bartik-type IV strategy, we show that not only non-college-educated workers but also, in the same proportion, workers with fewer than four years of college are negatively impacted by this routinebiased technological change. The latter skill group currently represents 30% of the US population. We show that only 10% to 20% of the impact on both educational groups is related to occupational and industrial downgrading (the composition eect) and that most of the wage impact occurs within industries and occupations, including manual service occupations. This is consistent with the displacement eect described in the theoretical literature on task-biased technological change and automation.

Suggested Citation

  • Clément Bosquet & Paul Maarek & Elliot Moiteaux, 2021. "Routine-biased technological change and wages by education level: Occupational downgrading and displacement effects," Working Papers hal-03270715, HAL.
  • Handle: RePEc:hal:wpaper:hal-03270715
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-03270715
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    More about this item

    Keywords

    job polarization; routine occupations; wages; education;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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