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Automation, techies, and labor market restructuring

In: Handbook on Labour Markets in Transition

Author

Listed:
  • Ariell Reshef
  • Farid Toubal

Abstract

While job polarization was a salient feature in European economies in the decade up to 2010, this phenomenon has all but disappeared, except in a handful of Southern-European economies. The decade following 2010 is characterized by occupational upgrading, where low-paid jobs shrink and high paid jobs expand. We show that this is associated with automation: employment shares in low paid, highly automatable jobs shrinks, while employment shares of better paid jobs that are unlikely to be automated expands. Techies (engineers and technicians with strong STEM skills) help explain cross country variation in occupational upgrading: economies that are abundant in techies or exhibit high growth of techies see strong skill upgrading; in contrast, polarization is observed in economies with few techies. Robotization is associated with skill upgrading in manufacturing. We discuss the additional roles of globalization, structural change and labor market institutions in driving these phenomena. Hitherto, artificial intelligence (AI) seems to have similar impacts as other automation technologies. However, there is uncertainty about what new AI technologies harbor.

Suggested Citation

  • Ariell Reshef & Farid Toubal, 2024. "Automation, techies, and labor market restructuring," Chapters, in: Stéphane Carcillo & Stefano Scarpetta (ed.), Handbook on Labour Markets in Transition, chapter 1, pages 15-35, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:19758_1
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    File URL: https://www.elgaronline.com/doi/10.4337/9781839106958.00007
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