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Title: Does Automation Drive the Labor Market?
Citation Type: Miscellaneous
Publication Year: 2017
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Abstract: In this note we question the emerging view that automation is a primary driver of wage and employment outcomes in labor markets. While it is indeed the case that on average middle-wage occupations have experienced lower wage and employment growth in recent decades, we show that this fact masks substantial occupation-level variation. In fact, the difference in average wage and employment growth between middle-wage and high-wage occupations is small compared to the differences in wage and employment growth of occupations within wage brackets. The ability of automation to account for this occupation-level variation is limited. We then discuss evidence that occupation-level outcomes are best explained by the complexity of an occupation – the extent to which tasks performed on the job require higher-order skills such as the ability to abstract, solve problems, make decisions, or communicate effectively.
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Authors: Caines, Colin; Hoffmann, Florian; Kambourov, Gueorgui
Publisher: Board of Governors of the Federal Reserve System
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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