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

Authors

Brad J. Hershbein, W.E. Upjohn Institute for Employment Research and IZAFollow
Lisa B. Kahn, Yale University, National Bureau of Economic Research, and IZAFollow

Upjohn Author ORCID Identifier

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

Series

Upjohn Institute working paper ; 16-254

**Published Version**

In American Economic Review 108(7): 1737-1772

DOI

10.17848/wp16-254

Issue Date

March 25, 2016, Revised August 2, 2016, Revised October 17, 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, and that these differences across MSAs persist through the end of 2015. The increases are prevalent within occupations, more pronounced in the non-traded sector, driven by both within-firm upskilling and substitution from older to newer firms, accompanied by increases in capital stock, and are evident in realized employment. We argue that this evidence reflects the restructuring of production toward more skilled workers and routine-labor saving technologies, and that the Great Recession accelerated this process.

Subject Areas

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