Complex-Task Biased Technological Change and the Labor Market

Colin Caines, Florian Hoffmann and Gueorgui Kambourov

No 1192, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: In this paper we study the relationship between task complexity and the occupational wage- and employment structure. Complex tasks are defined as those requiring higher-order skills, such as the ability to abstract, solve problems, make decisions, or communicate effectively. We measure the task complexity of an occupation by performing Principal Component Analysis on a broad set of occupational descriptors in the Occupational Information Network (O*NET) data.We establish four main empirical facts for the U.S. over the 1980-2005 time period that are robust to the inclusion of a detailed set of controls, subsamples, and levels of aggregation: (1) There is a positive relationship across occupations between task complexity and wages and wage growth; (2) Conditional on task complexity, routine-intensity of an occupation is not a significant predictor of wage growth and wage levels; (3) Labor has reallocated from less complex to more complex occupations over time; (4) Within groups of occupations with similar task complexity labor has reallocated to non-routine occupations over time. We then formulate a model of Complex-Task Biased Technological Change with heterogeneous skills and show analytically that it can rationalize these facts. We conclude that workers in non-routine occupations with low ability of solving complex tasks are not shielded from the labor market effects of automatization.

Keywords: Occupational Task Content; Complex Tasks; Wage Polarization; Skills (search for similar items in EconPapers)
JEL-codes: E24 J21 J23 J24 J31 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2017-02
New Economics Papers: this item is included in nep-lma and nep-mac
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Citations: View citations in EconPapers (21)

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Related works:
Journal Article: Complex-Task Biased Technological Change and the Labor Market (2017)
Working Paper: Complex-Task Biased Technological Change and the Labor Market (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1192

DOI: 10.17016/IFDP.2017.1192

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