We Can Work It Out: The Impact of Technological Change on the Demand for Low‐Skill Workers

Abstract

There is little doubt that technology has had the most profound effect on altering the tasks that we humans do in our jobs. Economists have long speculated on how technical change affects both the absolute demand for labour as a whole and the relative demands for different types of labour. In recent years, the idea of skill-biased technical change has become the consensus view about the current impact of technology on labour demand, namely that technical change leads to an increase in the demand for skilled relative to unskilled labour painting a bleak future for the employment prospects of less-skilled workers. But, drawing on a recent paper by Autor, Levy and Murnane (2003) about the impact of technology on the demand for different types of skills, this paper argues that the demand in the least-skilled jobs may be growing. But, it is argued that employment of the less-skilled is increasingly dependent on physical proximity to the moreskilled and may also be vulnerable in the long-run to further technological developments.

Upgrading or polarization? Occupational change in Britain, Germany, Spain and Switzerland, 1990-2008

“…In the long run, the main driving force behind changes in the tasks humans do in their jobs is technology (Manning, 2004). In comparison, other demand-side factors such as international trade or shifts in product demand may at best play a modest role (OECD, 2005).…”

“…The SBTC explanation has been challenged by the 'routinization' hypothesis (Autor et al, 2003;Manning, 2004). Its central argument involves a re-specification of the types of jobs that are most likely to be replaced by technology.…”

“…The first focuses on labour demand and advances a more nuanced theory of skill-biased technological change where computers complement both high-skilled analytical and lowskilled interpersonal tasks, but substitute for mid-skilled manual and clerical tasks (Autor et al, 2003(Autor et al, , 2008Manning, 2004). A second explanation emphasizes changes in labour supply and highlights-for the USA-a slowdown in skill supply growth due to slower educational expansion (Goldin and Katz, 2007) and increasing Hispanic immigration (Wright and Dwyer, 2003).…”

The Geography of Inequality: Difference and Determinants of Wage and Income Inequality across US Metros

“…Such rapidly growing occupations require spatial proximity to the populations and markets they serve and thus cluster around highly affluent populations and areas (Manning, 2004;Goos and Manning, 2007;Goos, Manning, and Salomons, 2009). The personalized nature of such low-skill service work reinforces the growth and co-location of high-skill and low-skill jobs in the same places, underpinning and reinforcing regional wage inequality.…”

Immigration, Family Responsibilities and the Labor Supply of Skilled Native Women

“…Manning (2004) and Mazzolari and Ragusa (2007) argue that the increase in the demand for low-wage occupations over the last two decades is driven by a surge in the demand for non-traded household services by high-wage earners. 4 Our results provide evidence of a demand for household services that responds to price changes driven by immigration.…”