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 Rochester

Upjohn Author ORCID Identifier

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

Publication Date

10-2016

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.

Issue Date

October 2016, Revised September 2017

Subject Areas

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