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Title: Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings

Citation Type: Miscellaneous

Publication Year: 2018

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Abstract: Routine-biased technological change (RBTC), whereby routine-task jobs are replaced by machines and overseas labor, shifts demand toward high- and low-skill jobs, resulting in job polarization of the U.S. labor market. We test whether recessions accelerate this process. Exploiting a new database containing the near-universe of electronic job vacancy postings and cross-sectional variation in the MSA-level employment shock generated by the Great Recession, we estimates changes in skill requirements within occupations and rms. We find that postings in hard-hit metro areas have substantially larger increases in education, experience, cognitive, and computer skill requirements in 2010, relative to 2007, and that these increases persist through the end of our sample in 2015. We find important roles for both within-firm changes in skill demand and upskilling in firms that did not post in 2007. We also show that among publicly-traded firms in our data, those that upskill more also increase capital stock by more over the same time period. We argue that upskilling is driven primarily by firm restructuring of production toward more-skilled workers. Our result is unlikely to be driven by firms' opportunistically seeking to hire more-skilled workers in a slack labor market, and we rule out other cyclical explanations. We thus present the first direct evidence that the Great Recession precipitated new technological adoption.

Url: http://faculty.som.yale.edu/lisakahn/documents/HershbeinKahn_webappendix.pdf

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Authors: Hershbein, Brad; Kahn, Lisa, B

Publisher: Yale University

Data Collections: IPUMS USA, IPUMS CPS

Topics: Other

Countries: United States