The Great Reversal in the Demand for Skill and Cognitive Tasks

Paul Beaudry, David Green and Benjamin M. Sand

No 18901, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What explains the current low rate of employment in the US? While there has been substantial debate over this question in recent years, we believe that considerable added insight can be derived by focusing on changes in the labor market at the turn of the century. In particular, we argue that in about the year 2000, the demand for skill (or, more specifically, for cognitive tasks often associated with high educational skill) underwent a reversal. Many researchers have documented a strong, ongoing increase in the demand for skills in the decades leading up to 2000. In this paper, we document a decline in that demand in the years since 2000, even as the supply of high education workers continues to grow. We go on to show that, in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together. In order to understand these patterns, we offer a simple extension to the standard skill biased technical change model that views cognitive tasks as a stock rather than a flow. We show how such a model can explain the trends in the data that we present, and offers a novel interpretation of the current employment situation in the US.

JEL-codes: J2 J31 O33 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-hrm, nep-lab, nep-lma and nep-neu
Note: EFG LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (78)

Published as The Great Reversal in the Demand for Skill and Cognitive Tasks , Paul Beaudry, David A. Green, Benjamin M. Sand. in Labor Markets in the Aftermath of the Great Recession , Card and Mas. 2016
Published as Paul Beaudry & David A. Green & Benjamin M. Sand, 2016. "The Great Reversal in the Demand for Skill and Cognitive Tasks," Journal of Labor Economics, vol 34(S1), pages S199-S247.

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Journal Article: The Great Reversal in the Demand for Skill and Cognitive Tasks (2016)
Chapter: The Great Reversal in the Demand for Skill and Cognitive Tasks (2013)
Working Paper: The great reversal in the demand for skill and cognitive tasks (2013)
Working Paper: The great reversal in the demand for skill and cognitive tasks (2013)
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