[Previous Version: CFM Discussion Paper 2017-28, September 2017]
Abstract: This paper documents that employment and wage growth of occupations increase monotonically with measures of occupational skill intensity since 1980 in the US, contrary to the popular interpretation of labor market polarization. Skill-biased occupation growth is not driven by a specific gender, age group, decade, or occupation classification. A simple extension of routinization framework which differentiates market quality and cognitive skills is capable of jointly explaining skill-biased occupation growth and polarization as well as their evolution over time.
Interpersonal-Service Tasks and the Change in the US Employment Structure
(Draft Available Soon, See the first two chapters of my PhD thesis)
Abstract: The rise of service economy is a constant of modern economic growth. This paper takes a task-based perspective on the growth of services. Customers are inseparable from the production of interpersonal-service tasks and retard the productivity growth through their preferences and own capabilities. Customers, unlike workers, are hard to train and direct; and any change in the production process to increase efficiency potentially disturbs customer satisfaction. I document that the key task aspect characterizing service sector specialization of occupations is interpersonal interactions with customers (interpersonal-service tasks). The growth of occupation employment after 1970 in the US is strongly predicted by the interpersonal-service task intensity. The evidence suggests that interpersonal-service task content is associated with slower labor productivity growth while it is not related to computer adoption that revolutionized the workplace in recent decades. I reconcile the empirical findings of the paper in a model of occupation-based structural change with two distinct channels of technology where interpersonal-service task intensity of occupations is linked to slower occupation-specific technical change, and routinizability leads to deepening of ICT capital. The model accounts for a substantial portion of occupational and sectoral employment share changes in the US labor market between 1987 and 2014. While both task aspects are significant drivers of job polarization, interpersonal-service tasks stand out in explaining the growth of service sector. The results imply a key role for task-specific technical change compared to sector-specific technical change in driving the disaggregate employment trends. I also observe that the negative impact of task-routinizability on employment demand changes vanishes for the post-2000 period, suggesting that most of the contribution of routine-biased technical change to job polarization took place during 1990s.