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Complex-Task Biased Technological Change and the Labor Market

Listed author(s):
  • Colin Caines
  • Florian Hoffmann
  • Gueorgui Kambourov

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.

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Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-576.

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Length: Unknown pages
Date of creation: 28 Jan 2017
Handle: RePEc:tor:tecipa:tecipa-576
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  1. Gueorgui Kambourov & Iourii Manovskii, 2009. "Occupational Mobility and Wage Inequality," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 731-759.
  2. Katz, Lawrence F., 2014. "America's Jobs Challenges and the Continuing Role of the U.S. Department of Labor," Scholarly Articles 12374798, Harvard University Department of Economics.
  3. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
  4. repec:sae:ilrrev:v:67:y:2014:i:2.5:p:578-583 is not listed on IDEAS
  5. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
  6. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  7. David J. Deming, 2015. "The Growing Importance of Social Skills in the Labor Market," NBER Working Papers 21473, National Bureau of Economic Research, Inc.
  8. 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).
  9. 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.
  10. Paul Beadry & David A. Green & Ben Sand, 2013. "The great reversal in the demand for skill and cognitive tasks," LSE Research Online Documents on Economics 58200, London School of Economics and Political Science, LSE Library.
  11. 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.
  12. Shintaro Yamaguchi, 2011. "Tasks and Heterogeneous Human Capital," Department of Economics Working Papers 2011-06, McMaster University.
  13. Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997. "Capital-skill complementarity and inequality: a macroeconomic analysis," Staff Report 239, Federal Reserve Bank of Minneapolis.
  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. Iourii Manovskii & Gueorgui Kambourov, 2004. "Occupational Specificity of Human Capital," 2004 Meeting Papers 197, Society for Economic Dynamics.
  16. 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).
  17. Maarten Goos & Alan Manning & Anna Salomons, 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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