Automation, globalization and vanishing jobs: a labor market sorting view

Faia, Ester, Laffitte, Sebastien, Mayer, Maximilian and Ottaviano, Gianmarco I. P. (2020) Automation, globalization and vanishing jobs: a labor market sorting view. CEP Discussion Papers (1695). Centre for Economic Performance, LSE, London, UK.

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Abstract

We show, theoretically and empirically, that the effects of technological change associated with automation and offshoring on the labor market can substantially deviate from standard neoclassical conclusions when search frictions hinder efficient assortative matching between firms with heterogeneous tasks and workers with heterogeneous skills. Our key hypothesis is that better matches enjoy a comparative advantage in exploiting automation and a comparative disadvantage in exploiting offshoring. It implies that automation (offshoring) may reduce (raise) employment by lengthening (shortening) unemployment duration due to higher (lower) match selectivity. We find empirical support for this implication in a dataset covering 92 occupations and 16 sectors in 13 European countries from 1995 to 2010.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2020 The Authors
Divisions:	Centre for Economic Performance
Subjects:	T Technology > T Technology (General) H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HC Economic History and Conditions
JEL classification:	O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
Date Deposited:	18 Jan 2021 09:33
Last Modified:	14 Sep 2024 04:12
URI:	http://eprints.lse.ac.uk/id/eprint/108458

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