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Biased Technological Change and Employment Reallocation

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  • Zsófia L. Bárány
  • Christian Siegel
Abstract
To study the drivers of the employment reallocation across sectors and occupations between 1960 and 2010 in the US we propose a model where technology evolves at the sector-occupation cell level. This framework allows us to quantify the bias of technology across sectors and across occupations. We implement a novel method to extract changes in sector-occupation cell productivities from the data. Using a factor model we find that occupation and sector factors jointly explain 74-87 percent of cell productivity changes, with the occupation component being by far the most important. While in our general equilibrium model both factors imply similar reallocations of labor across sectors and occupations, quantitatively the bias in technological change across occupations is much more important than the bias across sectors.

Suggested Citation

  • Zsófia L. Bárány & Christian Siegel, 2018. "Biased Technological Change and Employment Reallocation," Studies in Economics 1801, School of Economics, University of Kent.
    • Handle: RePEc:ukc:ukcedp:1801
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michael J Böhm & Terry Gregory & Pamela Qendrai & Christian Siegel, 2021. "Demographic change and regional labour markets," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(1), pages 113-131.
    2. Yang Shen, 2024. "Future jobs: analyzing the impact of artificial intelligence on employment and its mechanisms," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-33, April.
    3. Melanie Arntz & Sebastian Findeisen & Stephan Maurer & Oliver Schlenker, 2024. "Are we yet sick of new technologies? The unequal health effects of digitalization," CEP Discussion Papers dp1984, Centre for Economic Performance, LSE.
    4. Pena, Werner & Siegel, Christian, 2023. "Routine-biased technical change, structure of employment, and cross-country income differences," CEPR Discussion Papers 18366, C.E.P.R. Discussion Papers.
    5. Daron Acemoglu & Pascual Restrepo, 2022. "Tasks, Automation, and the Rise in U.S. Wage Inequality," Econometrica, Econometric Society, vol. 90(5), pages 1973-2016, September.
    6. Náplava Radek, 2019. "Changing structure of Employment in Europe: Polarization Issue," Review of Economic Perspectives, Sciendo, vol. 19(4), pages 307-318, December.
    7. Cnossen, Femke & Piracha, Matloob & Tchuente, Guy, 2021. "Learning the Right Skill: The Returns to Social, Technical and Basic Skills for Middle-Educated Graduates," GLO Discussion Paper Series 979, Global Labor Organization (GLO).
    8. Antonio Martins-Neto & Nanditha Mathew & Pierre Mohnen & Tania Treibich, 2024. "Is There Job Polarization in Developing Economies? A Review and Outlook," The World Bank Research Observer, World Bank, vol. 39(2), pages 259-288.
    9. Wang, Ting & Zhang, Yi & Liu, Chun, 2024. "Robot adoption and employment adjustment: Firm-level evidence from China," China Economic Review, Elsevier, vol. 84(C).
    10. Rob Davies & Dirk van Seventer, 2020. "Labour market polarization in South Africa: A decomposition analysis," WIDER Working Paper Series wp-2020-17, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    biased technological change; structural change; employment polarization;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • 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

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