Occupations at risk: explicit task content and job security

The empirical investigation into the economic relevance of knowledge codification lacks behind the allied theoretical contributions. The article empirically examines the link between codifiable work content and code-based technologies. For this purpose, we use detailed information about the tasks that employees performed at their jobs, and the work devices assisting them, in West Germany, over a period of 27 years. The main results suggest that automation decreased both the explicit manual task content within occupations and the job security of occupations specialized in such tasks. Occupations which frequently performed explicit manual tasks were disproportionally concentrated in middle of the wage distribution, contributing to the widely-observed polarization of jobs

Human Capital in Transition: on the Changing skill requirements and skill transferability

During the last several decades developed economies underwent salient employment shifts from manufacturing toward service production. This dissertation investigates the meaning of these changes for the occupational and skill structure of the German economy. It elaborates on the skills and occupations at risk of leaving the economy, as well as the factors that drive this risk. The altering skill structure is partly reflected in occupational switching. Therefore, in one chapter I analyze the transferability of human capital across occupations. When workers change occupations part of the previously acquired skills becomes idle at the new job and new skills have to be learnt. In the thesis, previously learnt skills which are not usable at the new occupation are called human capital redundancy and skills that yet have to be learnt are called human capital shortage. After creating measures of human capital shortage and human capital redundancy, we study their role in occupational change and wage dynamics. The major findings of the dissertation can be summarized as follows. Occupations characterized by tasks that can be explained in detailed step-by-step procedures (explicit tasks) gradually declined their share in the German economy in the observed period (1975-2004). Occupations characterized by problem-solving and interactive tasks increased their share in the economy. These changes are correlated with the outsourcing practices of plants, but not with the investments in computer technology. Furthermore, workers are less likely to make occupational switches which render their human capital redundant. They are also less likely to switch to occupations where they have to learn new skills. One exception are young workers who change occupations voluntarily. These workers likely move to more ambitious occupations as part of their career paths. Skill shortages are initially penalized at the new job through lower starting wage, but this penalty is later compensated through steeper wage growth at the new occupation. Skill redundancy is poorly rewarded at the new job

Technology, outsourcing, and the demand for heterogeneous labor: Exploring the industry dimension

It has become common within the literature of skill-biased technological change to look at technologies, as well as their impact on the demand for labor as homogeneous across industries. This paper challenges this view. Using a linked employer-employee panel of Germany differentiated by industries for the period 2001-2005, we investigate substitution effects between labor of different skills (tasks) on the one hand, and technology as well as outsourcing on the other. Our findings are at odds with the idea of economy-wide homogeneity of substitution patterns. We find that in some industries IT capital substitutes for labor, while it complements it in others. However, substitution patterns are symmetric across labor types. Outsourcing often correlates negatively with the demand for labor performing explicit and problem-solving tasks. It is mainly uncorrelated or positively correlated with the demand for labor performing interactive tasks. The outsourcing-related results support the offshoring theory proposed by Blinder (2006).demand for skills, technology, outsourcing

Human Capital Mismatches along the Career Path

Human capital is transferable across occupations, but only to a limited extent because of differences in occupational skill-profiles. Higher skill overlap between occupations renders less of individuals' human capital useless in occupational switches. Current occupational distance measures neglect that differences in skill complexities between occupations yield skill mismatch asymmetric in nature. We propose characterizing occupational switches in terms of human capital shortages and redundancies. This results in superior predictions of individual wages and occupational switches. It also allows identifying career movements up and down an occupational complexity ladder, and assessing the usefulness of accumulated skill-profiles at an individual's current job.skill mismatch, skill transferability, occupational change, human capital, wages

Occupations at risk: The task content and job stability

In the last few decades, Germany, similar to other developed countries, has been witnessing a sharp decline of the jobs that used to constitute the middle-class of the 1970s and the 1980s. This decline has been associated with the level to which jobs are codifiable. This is because, some argue, codifiable tasks are more prone to technological substitution and outsourcing than tacit tasks. This article empirically investigates two crucial aspects of the decline of codified jobs. First, it studies what happened to the workers in codified occupations in terms of unemployment, occupational change, and wages. Second, it revisits the hypothesis that code-based technologies are the major driver of this labour market shift. We find that job codification is associated with higher unemployment and higher occupational change. It is also associated with wage losses for the workers who left routinized jobs. We find however little evidence that code-based technologies were the driving factor behind these dynamics.occupations, automation, job tasks, occupational change, unemployment, wages

Human Capital Mismatches along the Career Path

Human capital is transferable across occupations, but only to a limited extent because of differences in occupational skill-profiles. Higher skill overlap between occupations renders less of individuals' human capital useless in occupational switches. Current occupational distance measures neglect that differences in skill complexities between occupations yield skill mismatch asymmetric in nature. We propose characterizing occupational switches in terms of human capital shortages and redundancies. This results in superior predictions of individual wages and occupational switches. It also allows identifying career movements up and down an occupational complexity ladder, and assessing the usefulness of accumulated skill-profiles at an individual's current job

Technology, outsourcing, and the demand for heterogeneous labor: Exploring the industry dimension

It has become common within the literature of skill-biased technological change to look at technologies, as well as their impact on the demand for labor as homogeneous across industries. This paper challenges this view. Using a linked employer-employee panel of Germany differentiated by industries for the period 2001-2005, we investigate substitution effects between labor of different skills (tasks) on the one hand, and technology as well as outsourcing on the other. Our findings are at odds with the idea of economy-wide homogeneity of substitution patterns. We find that in some industries IT capital substitutes for labor, while it complements it in others. However, substitution patterns are symmetric across labor types. Outsourcing often correlates negatively with the demand for labor performing explicit and problem-solving tasks. It is mainly uncorrelated or positively correlated with the demand for labor performing interactive tasks. The outsourcing-related results support the offshoring theory proposed by Blinder (2006)

Industry dynamics and highly qualified labor mobility

The literature on knowledge spillovers offers substantial evidence that workers, as main carriers of knowledge, play a role in the diffusion of knowledge among firms. One of the channels through which knowledge is diffused is the job-to-job mobility of workers. The research question addressed in this study is an empirical exploration of the industry-specific factors that influence the level of job-to-job mobility of highly qualified workers (HQWs) within three-digit industrial sectors. To this end, we use panel data based on the social security records of the German Federal Employment Agency. We find that HQW job-to-job mobility is dependent on technology-specific and an industry’s evolution-specific factors. The results show a significant and positive effect of the technological regime and the level of job destruction on the degree of voluntary and overall HQW mobility. The intra-industry mobility of this group is also affected by establishment-size effects, the inflow of HQWs from other industries, and the type of industry (service or manufacturing)

Occupations at risk: The task content and job security

While earlier literature proposed a monotonic relationship between the skill level (as measured by educational attainment) and employment prospects, recent literature suggests that this relationship has changed and that it is now necessary to distinguish between different kinds of skills and tasks in order to understand the recent occupational structure changes in developed economies. We study the occupational dynamics in the western part of Germany over the last three decades and confirm that occupations characterized by high intensity of interactive and problem-solving tasks have been increasing their employment share at the expense of occupations with a high level of codifiable tasks (tasks that can be described by step-by-step procedures or rules). We provide evidence at the individual level that jobs which involve a high instance of codifiable tasks are associated with lower job security. The pattern is present at different educational levels and in various broadly defined industries. It is also present in both the pre-reunification period and the period after the German reunifiation. The results are in line with a theory of technological change where computer-based technologies substitute for codifiable tasks (Autor, Levy, and Murnane, 2003)

The Impact of Skill Mismatch on Earnings Losses after Job Displacement

The long-term earnings losses of displaced workers are substantial. We investigate the role of post-displacement occupational matching in explaining the cost of job displacement. We combine German administrative data on the work history of displaced workers with information on the task content of more than 260 occupations, providing a measure of skill mismatch between a worker's pre- and post-displacement occupation. We find that displaced occupational switchers suffer average wage losses of more than 8% over 15 years. However, displaced workers moving to occupations where they are initially underqualified quickly manage to return to their pre-displacement earnings path, and even gain from switching in the long run. Our preliminary results suggest that policy should encourage the requalification of displaced workers to occupations that are more skill demanding than their pre-displacement occupations