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The Micro and Macro of Disappearing Routine Jobs: A Flows Approach

Author

Listed:
  • Guido Matias Cortes
  • Nir Jaimovich
  • Christopher J. Nekarda
  • Henry E. Siu

Abstract

The U.S. labor market has become increasingly polarized since the 1980s, with the share of employment in middle-wage occupations shrinking over time. This job polarization process has been associated with the disappearance of per capita employment in occupations focused on routine tasks. We use matched individual-level data from the CPS to study labor market flows into and out of routine occupations and determine how this disappearance has played out at the "micro" and "macro" levels. At the macro level, we determine which changes in transition rates account for the disappearance of routine employment since the 1980s. We find that changes in three transition rate categories are of primary importance: (i) that from unemployment to employment in routine occupations, (ii) that from labor force non-participation to routine employment, and (iii) that from routine employment to non-participation. At the micro level, we study how these transition rates have changed since job polarization, and the extent to which these changes are accounted for by changes in demographic composition or changes in the behavior of individuals with particular demographic characteristics. We find that the preponderance of changes is due to the propensity of individuals to make such transitions, and relatively little due to demographics. Moreover, we find that changes in the transition propensities of the young are of primary importance in accounting for the fall in routine employment.

Suggested Citation

  • Guido Matias Cortes & Nir Jaimovich & Christopher J. Nekarda & Henry E. Siu, 2014. "The Micro and Macro of Disappearing Routine Jobs: A Flows Approach," NBER Working Papers 20307, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20307
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Christopher L. Foote & Richard W. Ryan, 2015. "Labor-Market Polarization over the Business Cycle," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 371-413.
    4. 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.
    5. Guido Matias Cortes, 2016. "Where Have the Middle-Wage Workers Gone? A Study of Polarization Using Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 63-105.
    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. David H. Autor & David Dorn & Gordon H. Hanson, 2015. "Untangling Trade and Technology: Evidence from Local Labour Markets," Economic Journal, Royal Economic Society, vol. 0(584), pages 621-646, May.
    8. Moscarini, Giuseppe & Thomsson, Kaj, 2006. "Occupational and Job Mobility in the US," Working Papers 19, Yale University, Department of Economics.
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    Citations

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    Cited by:

    1. Nir Jaimovich & Henry E. Siu, 2017. "High-Skilled Immigration, STEM Employment, and Non-Routine-Biased Technical Change," NBER Chapters,in: High-Skilled Migration to the United States and its Economic Consequences National Bureau of Economic Research, Inc.
    2. James Harrigan & Ariell Reshef & Farid Toubal, 2016. "The March of the Techies: Technology, Trade, and Job Polarization in France, 1994-2007," Working Papers 2016-15, CEPII research center.
    3. Christopher L. Foote & Richard W. Ryan, 2015. "Labor-Market Polarization over the Business Cycle," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 371-413.
    4. Joanne Lindley & Stephen Machin, 2016. "The Rising Postgraduate Wage Premium," Economica, London School of Economics and Political Science, vol. 83(330), pages 281-306, April.
    5. Terry Gregory & A.M. Salomons & Ulrich Zierahn, 2016. "Racing With or Against the Machine? Evidence from Europe," Working Papers 16-05, Utrecht School of Economics.
    6. Carrillo-Tudela, Carlos & Hobijn, Bart & She, Powen & Visschers, Ludo, 2016. "The extent and cyclicality of career changes: Evidence for the U.K," European Economic Review, Elsevier, vol. 84(C), pages 18-41.
    7. Pau S. Pujolas & Zachary L. Mahone, 2017. "Optimal Design and Quantitative Evaluation of the Minimum Wage," Department of Economics Working Papers 2017-15, McMaster University.
    8. Joao Alfredo Galindo da Fonseca & Giovanni Gallipoli & Yaniv Yedid-Levi, 2017. "Match Quality, Contractual Sorting and Wage Cyclicality," Working Papers 2017-076, Human Capital and Economic Opportunity Working Group.
    9. David Autor, 2014. "Polanyi's Paradox and the Shape of Employment Growth," NBER Working Papers 20485, National Bureau of Economic Research, Inc.
    10. Rahul Anand & Siddharth Kothari & Naresh Kumar, 2016. "South Africa; Labor Market Dynamics and Inequality," IMF Working Papers 16/137, International Monetary Fund.
    11. Carrillo-Tudela, Carlos & Hobijn, Bart & She, Powen & Visschers, Ludo, 2015. "The Extent and Cyclicality of Career Changes: Evidence for the UK," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-52, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Salvatori, Andrea, 2015. "The Anatomy of Job Polarisation in the UK," IZA Discussion Papers 9193, Institute for the Study of Labor (IZA).
    13. Carlos Carrillo-Tudela & Bart Hobijn & Powen She & Ludo Visschers, 2014. "The Extent and Cyclicality of Career Changes: Evidence for the UK (first version)," ESE Discussion Papers 246, Edinburgh School of Economics, University of Edinburgh.
    14. repec:eee:labeco:v:48:y:2017:i:c:p:198-214 is not listed on IDEAS
    15. Sébastien Bock, 2018. "Job Polarization and Unskilled Employment Losses in France," PSE Working Papers halshs-01513037, HAL.
    16. Nellie Zhao & Henry Hyatt & Isabel Cairo, 2016. "The U.S. Job Ladder and the Low-Wage Jobs of the New Millennium," 2016 Meeting Papers 1414, Society for Economic Dynamics.
    17. David H. Autor, 2015. "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 3-30, Summer.
    18. Muendler, Marc-Andreas, 2017. "Trade, technology, and prosperity: An account of evidence from a labor-market perspective," WTO Staff Working Papers ERSD-2017-15, World Trade Organization (WTO), Economic Research and Statistics Division.

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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • J0 - Labor and Demographic Economics - - General

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