Routine-Biased technical change: Individual-Level evidence from a plant closure

Maarten Goos, Emilie Rademakers and Ronja Röttger

Research Policy, 2021, vol. 50, issue 7

Abstract: Routine-biased technical change (RBTC) argues that digitisation decreases job opportunities for workers with routine task competencies, but increases job opportunities for workers with nonroutine task competencies. While there is considerable evidence for RBTC at the aggregate level, its effects on individual workers are yet to be fully understood. Therefore, this paper uses unique survey data of workers at a large car plant who became unemployed when the plant closed. In line with the RBTC hypothesis, we find that re-employment probabilities 1,5 years after the plant’s closure are substantially higher for workers with nonroutine task competencies and with digital skills. Moreover, for the subset of individuals who were re-employed 1,5 years after the plant’s closure, we find that the nonroutine content of job tasks is higher, wages are lower, and contracts are less permanent. Finally, our paper shows that a crude age-based early retirement policy that was negotiated as part of the plant’s closure and that ignores workers’ skills, results in significant foregone employment of older workers with nonroutine task competencies.

Keywords: Digitization; Task-biased technical change; Nonroutine task competencies and digital skills; Age-based versus skill-based policies (search for similar items in EconPapers)
JEL-codes: J26 J63 J64 O33 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:50:y:2021:i:7:s0048733320300822

DOI: 10.1016/j.respol.2020.104002

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