Routine-biased technological change and employee outcomes after mass layoffs: Evidence from Brazil

Antonio Neto, Xavier Cirera and Alex Coad ()

No 2022-014, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: We investigate the impact of "routinization" on the labor outcomes of displaced workers. We use a rich Brazilian panel dataset and an occupation-task mapping to examine the effect of job displacement in different groups, classified according to their tasks. Our main result is that following a layoff, workers previously employed in routine-intensive occupations suffer a more significant decline in wages and more extended periods of unemployment. As expected, job displacement has a negative and lasting impact on wages. Still, workers in routine-intensive occupations are more impacted than those in non-routine occupations in terms of wages (an increase of one point in the routineintensity index results in a further decline of 2 percent in workers' relative wages) and employment. Furthermore, our results indicate that workers in routine-intensive occupations are more likely to change occupations after the shock, and those who do not switch occupational fields suffer a more significant decline in wages. Lastly, even though the loss of employer-specific wage premiums explains 13 percent of displaced workers' drop in wages, it does not explain routine-intensive workers' more substantial losses.

Keywords: Technological change; innovation; Routine intensity; Job displacement; Mass layoffs; Occupational mobility; Brazil (search for similar items in EconPapers)
JEL-codes: J24 J63 O31 O33 O54 (search for similar items in EconPapers)
Date: 2022-04-19
New Economics Papers: this item is included in nep-lab and nep-tid
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Journal Article: Routine-biased technological change and employee outcomes after mass layoffs: evidence from Brazil (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2022014

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