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Title: Routine-Biased Technological Change and Hours Worked over the Business Cycle

Citation Type: Miscellaneous

Publication Year: 2019

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Abstract: Technological change has deeply shaped the U.S. labor market over the past four decades. It has been biased towards replacing routine labor through automation. We document business cycle features exhibited by routine-biased technological change. We ask if shifts in the task composition of labor demand away from routine labor account for the recessionary e ect of technology shocks on hours worked initially documented by Gali (1999). We show that such shifts in labor demand are able to generate a fall in hours worked within a Real Business Cycle model with capital-routine substitutability. We then bridge the gap between theory and data by building quarterly time series on hours worked and task premiums from the Current Population Survey. We assess the e ects of routine-biased technological change in the data by estimating a VAR model. Structural shocks are then identi ed by combining long-run exclusion and sign restrictions grounded in economic theory. Our results highlight that most of the decline in total hours worked is driven by routine-biased technology shocks through a decline in routine hours. This shock accounts for a signi cant amount of hours worked uctuations pointing out its relevance over the business cycle.

Url: https://idriss-fontaine-62.webself.net/file/si1067513/download/BF_V1-fi17960604.pdf

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Authors: Bock, Sébastien; Fontaine, Idriss

Publisher: Universite ́ Paris

Data Collections: IPUMS CPS

Topics: Other

Countries: United States