Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings

Authors

Brad J. Hershbein, W.E Upjohn Institute for Employment ResearchFollow
Lisa B. Kahn, University of RochesterFollow

Upjohn Author ORCID Identifier

https://orcid.org/0000-0002-2534-8164

Issue Date

October 2016, Revised September 2017

Abstract

We show that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas. These increases persist through at least the end of 2015 and are correlated with increases in capital investments, both at the MSA and firm-levels. We also find that effects are most pronounced in routine-cognitive occupations, which exhibit relative wage growth as well. We argue that this evidence is consistent with the restructuring of production toward routine-biased technologies and the more-skilled workers that complement them, and that the Great Recession accelerated this process.

Publisher

National Bureau of Economic Research

DOI

10.3386/w22762

Published Version

In American Economic Review 108(7): 1737-72

Subject Areas

LABOR MARKET ISSUES; Job security and unemployment dynamics; WORKFORCE DEVELOPMENT; Job skills and standards