Digging into the Digital Divide: Workers’ Exposure to Digitalization and Its Consequences for Individual Employment

While numerous studies have analyzed the aggregate employment effects of digital technologies, this paper focuses on the employment development of individual workers exposed to digitalization. We use a unique linked employer-employee data set for Germany and a direct measure of the first-time introduction of cutting-edge digitalization technologies in establishments between 2011 and 2016. Applying a matching approach, we compare workers in establishments investing in digital technologies with similar employees in establishments that do not make such an investment. We find that the employment stability of incumbent workers is lower in investing than non-investing establishments, but most displaced workers easily find jobs in other firms, and differences in days in unemployment are small. We also document substantial heterogeneities in the employment effects across skill groups, occupational tasks performed, and gender. Employment reactions to digitalization are most pronounced for both low- and high-skilled workers, for workers with non-routine tasks, and for female workers. Our results underline the importance of tackling the impending digital divide among different groups of workers

Racing With or Against the Machine? Evidence on the Role of Trade in Europe

Digital technologies displace labor from routine tasks, raising concerns that labor is racing against the machine. We develop an empirically tractable task-based framework to estimate the aggregate employment effects of routine-replacing technological change (RRTC), along with the labor and product demand channels through which this aggregate effect comes about, focusing on the role of inter-regional trade. While RRTC has indeed had strong displacement effects in Europe between 1999 and 2010, it has simultaneously created new jobs through increased product demand, resulting in net employment growth. However, the distribution of gains from technological progress matters for its job-creating potential

Markets for jobs and their task overlap

We show that tightness in markets for jobs for which an unemployed job seeker fully qualifies in terms of her task competencies is predictive of her unemployment duration. This suggests that the labour market is organized along jobs and their task content. We also find that unemployed job seekers do not compete in markets where they possess only part of the required task competencies, suggesting that task overlap across jobs is unimportant for worker mobility between job markets. This implies that adverse task-biased shocks are likely to have pronounced distributional consequences across workers with different task competencies. To illustrate this, we quantify the impact of technological progress that automates routine tasks, showing that this imposes substantial adjustment costs that are highly unevenly distributed across unemployed job seekers with routine versus non-routine task competencies

Firm-Level Automation: Evidence from the Netherlands

Studying firm-level adjustments is important for understanding the economic effects of workplace automation. So far, emerging firm-level evidence is focused on robotics and the manufacturing sector. In this paper, we document that the adoption of automation technologies extends beyond manufacturing firms. We identify firm-level automation events and show that automating firms experience faster employment and revenue growth than do nonautomating firms. However, around automation events themselves, employment growth slows markedly. Notably, we find that these effects are similar for manufacturing and nonmanufacturing firms, suggesting that an increasing diffusion of automation technology has important consequences for firms and their workers

How Do Workers Adjust When Firms Adopt New Technologies?

We investigate how workers adjust to firms’ investments into new digital technologies, including artificial intelligence, augmented reality, or 3D printing. For this, we collected novel data that links survey information on firms’ technology adoption to administrative social security data. We then compare individual outcomes between workers employed at technology adopters relative to non-adopters. Depending on the type of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills

OK Computer: Worker Perceptions of Algorithmic Recruitment

We provide evidence on how workers on an online platform perceive algorithmic versus human recruitment through two incentivized experiments designed to elicit willingness to pay for human or algorithmic evaluation. In particular, we test how information on workers’ performance affects their recruiter choice and whether the algorithmic recruiter is perceived as more or less gender-biased than the human one. We find that workers do perceive human and algorithmic evaluation differently, even though both recruiters are given the same inputs in our controlled setting. Specifically, human recruiters are perceived to be more error-prone evaluators and place more weight on personal characteristics, whereas algorithmic recruiters are seen as placing more weight on task performance. Consistent with these perceptions, workers with good task performance relative to others prefer algorithmic evaluation, whereas those with lower task performance prefer human evaluation. We also find suggestive evidence that perceived differences in gender bias drive preferences for human versus algorithmic recruitment

Technology implementation within enterprises and changes in the educational and age composition of enterprise workforces

This study examines how technology implementation within enterprises impacts the education and age composition of workforces, enterprise entrants and enterprise leavers. We advance the literature on the labor market consequences of technological change by focusing on the impact within workplaces where it is implemented, rather than making inferences from aggregate labor structural changes. We use large-scale Dutch matched employer–employee panel data to directly measure technology implementation within over 37,000 enterprises during the period 2000–2014. We find that the implementation of technology is associated with a decrease in the proportion of lower educated workers in enterprise workforces, and an increase in the proportion of middle educated workers. Interestingly, we find the proportion of workers aged 50+ increases with the implementation of technology, while the proportion of workers aged below 30 decreases. These changes seem to result from changes in the educational and age composition of enterprise entrants, rather than from changes in enterprise leavers

Technology implementation within enterprises and job ending among employees: A study of the role of educational attainment, organizational tenure, age and unionization

This study examines how technology implementation within workplaces impacts job ending among employees. We advance the literature on the labor market consequences of new technologies by focusing on their impact within workplaces where they are implemented, rather than inferring from aggregate labor structural changes. We also address how the impact of technology differs depending on workers education, organizational tenure and age. Using large-scale Dutch matched employer-employee panel data directly measuring technology implementation, we find that technology implementation is associated with an overall decrease in the probability of job ending. In line with the skill biased technological change hypothesis, higher educational attainment is associated with lower probabilities of job ending. Furthermore, we find older workers (around 50+) and workers with longer organizational tenure (around 12+ years) to have a higher probability of job ending when technology is implemented. Finally, we do not find the effects of technology implementation to differ depending on the union density of the industry in which an enterprise operates

Age Discrimination in Hiring Decisions:A Factorial Survey among Managers in Nine European Countries

This article analyses old-age discrimination in managers’ hypothetical hiring decisions. We expectthat older job candidates are less likely to be hired than equally qualified younger candidates.Statistical discrimination theory argues that when recruiters have more information about the candi-date’s skills, age is less important for hiring decisions. Given inconclusive results of previous studies,we elaborate on the theory by focusing on the content rather than the amount of information. Weargue that information is primarily influential if it debunks, rather than confirms, ageist stereotypes.To test this argument, a factorial survey was conducted among 482 managers in nine European coun-tries. The findings show that older candidates indeed receive lower hireability scores, and this findingis robust across countries and sectors. However, we do not find that stereotype-rejecting informationmoderates age discrimination: it does not matter whether recruiters have information that debunks orconfirms ageist stereotypes; age is equally important in both situations. Our findings suggest that forhiring decisions, the valuation of applicants’ skills and their age are largely independen

Competing first-price and second-price auctions

This paper theoretically investigates which auctions are selected by competing sellers when they can choose between first-price auctions and second-price auctions, and when homogeneously risk averse bidders endogenously enter one of the auctions. In order to study this, we first consider bidders’ entry decisions between exogenously given auctions. We find that there exists a symmetric entry equilibrium that is unique and is characterized by a mixed strategy, which depends on whether bidders exhibit constant, decreasing or increasing absolute risk aversion. In a next step, we endogenize the sellers’ choice of auctions.We show that competing sellers have a dominant strategy to select first-price auctions if bidders exhibit nondecreasing absolute risk aversion. If bidders exhibit decreasing absolute risk aversion, other equilibria may exist in which sellers select second-price auctions as well. For instance, we demonstrate that sellers may select second-price auctions if the distribution of private values is sufficiently skewed