Disappearing Routine Jobs: Who, How, and Why?

43 Pages Posted: 12 Dec 2016 Last revised: 14 Mar 2021

See all articles by Guido Matias Cortes

Guido Matias Cortes

York University

Nir Jaimovich

University of Zurich

Henry Siu

University of British Columbia (UBC) - Vancouver School of Economics

Date Written: December 2016

Abstract

We study the deterioration of employment in middle-wage, routine occupations in the United States in the last 35 years. The decline is primarily driven by changes in the propensity to work in routine jobs for individuals from a small set of demographic groups. These same groups account for a substantial fraction of both the increase in non-employment and employment in low-wage, non-routine manual occupations observed during the same time period. We analyze a general neoclassical model of the labor market featuring endogenous participation and occupation choice. We show that in response to an increase in automation technology, the model embodies an important tradeoff between reallocating employment across occupations and reallocation of workers towards non-employment. Quantitatively, we find that advances in automation technology on their own account for a relatively small portion of the joint decline in routine employment and associated rise in non-routine manual employment and non-employment.

Suggested Citation

Cortes, Guido Matias and Jaimovich, Nir and Siu, Henry, Disappearing Routine Jobs: Who, How, and Why? (December 2016). NBER Working Paper No. w22918, Available at SSRN: https://ssrn.com/abstract=2883954

Guido Matias Cortes (Contact Author)

York University ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Nir Jaimovich

University of Zurich ( email )

Henry Siu

University of British Columbia (UBC) - Vancouver School of Economics ( email )

6000 Iona Dr
Vancouver, BC V6T 1L4
Canada

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