This paper will address the trends of employment in correlation with technological progress. It will consider generally accepted economic theory as well as classical analysis, mathematical modeling and recent data. It is demonstrated that short-run impacts of technological advancements can cause temporary unemployment due to increased aggregate productivity. Long-run adjustments however can result in job polarization, which in turn results in income inequality. The possible negative impacts on the US economy as a whole are addressed and short-term fixes that could mitigate the undesirable side effects that come from these changes.

abstract: This dissertation consists of three essays on modern economic growth and structural transformation, in particular touching on the reallocation of labor across industries, occupations, and employment statuses. The first chapter investigates the quantitative importance of non-employment in the labor market outcomes for the United States. During the last 50 years, production has shifted from goods to services. In terms of occupations, the routine employment share decreased, giving way to increases in manual and abstract ones. These two patterns are related, and lower non-employment had an important role. A labor allocation model where goods, market services, and home services use different tasks as inputs is used for quantitative exercises. These show that non-employment could significantly slow down polarization and structural transformation, and induce significant displacement within the labor force. The second chapter, coauthored with Bart Hobijn and Todd Schoellman, looks at the demographic structure of structural transformation. More than half of labor reallocation during structural transformation is due to new cohorts disproportionately entering growing industries. This suggests substantial costs to labor reallocation. A model of overlapping generations with life-cycle career choice under switching costs and structural transformation is studied. Switching costs accelerate structural transformation, since forward-looking workers enter growing industries in anticipation of future wage growth. Most of the impact of switching costs shows on relative wages. The third chapter establishes that job polarization is a global phenomenon. The analysis of polarization is extended from a group of developed countries to a sample of 119 economies. At all levels of development, employment shares in routine occupations have decreased since the 1980s. This suggests that routine occupations are becoming increasingly obsolete throughout the world, rather than being outsourced to developing countries. A development accounting framework with technical change at the \textit{task} level is proposed. This allows to quantify and extrapolate task-specific productivity levels. Recent technological change is biased against routine occupations and in favor of manual occupations. This implies that in the following decades, world polarization will continue: employment in routine occupations will decrease, and the reallocation will happen mostly from routine to manual occupations, rather than to abstract ones. / Dissertation/Thesis / Doctoral Dissertation Economics 2019

京都大学 / 0048 / 新制・課程博士 / 博士(経済学) / 甲第20654号 / 経博第554号 / 新制||経||282(附属図書館) / 京都大学大学院経済学研究科経済学専攻 / (主査)教授 小佐野 広, 教授 柴田 章久, 准教授 敦賀 貴之 / 学位規則第4条第1項該当 / Doctor of Economics / Kyoto University / DGAM

This thesis studies the cyclical aspect of job polarization in Europe. Contributions include offering a comparison to the findings of previous research on the United States, and extending the analysis by introducing labor market institutions. The analysis is done in two parts, first showing that the observed link between job polarization and jobless recoveries in the US is observed in Europe, but not across all countries and business cycles. In Scandinavia, the process of job polarization appears smoother than the spurts observed in the US. The second part involves regression analyses of the relationship between labor market institutions, the business cycle and occupational employment. The results indicate that stricter labor market institutions are less robustly associated with Routine employment than other occupational groups and that Routine employment is more sensitive to the business cycle than other types of employment. Further, rigid labor market institutions may prevent some of the Routine decline associated with economic downturns, while not necessarily affecting the long run employment. Limitations of the analysis regards rough estimates of the key variables, number of observations and the lack of identification associated with cross-country analyses.

Au cours de ma thèse, j'ai mené des recherches macroéconomiques appliquées sur différents sujets, allant des effets de la polarisation des emplois sur la réallocation des travailleurs aux effets de la politique monétaire sur la structure du capital des entreprises et les décisions financières. Cette thèse recueille trois articles sur ces arguments. L'article principal de la thèse est mon job market paper. Ce travail m'a donné l'opportunité d'explorer en détail les effets du changement technologique sur la structure professionnelle des marchés du travail, mais aussi ses effets sur la réallocation des travailleurs entre les emplois et le processus de tri des compétences en emplois. En d'autres termes, l'article répond à ces questions: comment les travailleurs utilisent-ils l'échelle professionnelle lorsque l'innovation technologique change sa structure? Quelles sont leurs possibilités d'emploi, compte tenu de leurs compétences, lorsque la technologie change? Et quelles compétences les employeurs recherchent-ils? Cet argument m'a toujours intrigué, et sa pertinence attire actuellement l'attention des gouvernements et des décideurs dans de nombreuses économies développées. Ma recherche s'écarte de ces faits pour analyser quels sont les effets du changement technologique sur les travailleurs et les entreprises. En particulier, il montre -comme cela a déjà été documenté dans la littérature sur la polarisation des emplois- que l'innovation technologique remodèle la structure professionnelle de l'économie en détruisant certains types d'emplois. Cependant, je montre que l'innovation technologique modifie la demande de compétences dans chaque profession de manière à avoir des effets hétérogènes sur les travailleurs en termes de mobilité de la main-d'œuvre, d'opportunités d'emploi et de qualité de matching. En particulier, ce papier est le premier à montrer que la technologie - en provoquant la polarisation du marché du travail - déclenche de grands mouvements du haut vers le bas de l'échelle des emplois, de nombreux travailleurs finissant dans des professions moins rémunérées et moins qualifiées. Les effets du changement technologique sur les résultats et la dynamique du marché du travail sont également examinés dans le deuxième chapitre de cette thèse. En particulier, ce travail, en collaboration avec Joanne Tan, montre comment le changement technologique peut expliquer l'augmentation de la pénurie de main-d'œuvre (occupational shortage) et comment les différents segments du marché du travail y réagissent Dans le dernier chapitre de la thèse, je m'intéresse à la relation entre la politique monétaire et la décision de rachat d'actions. Ce sujet n'a aucun lien avec le précédent, mais j'ai toujours été intéressé par la façon dont les macro-variables peuvent influencer les décisions des gestionnaires au niveau micro. Dans ce travail, conjointement avec Assia Elgouacem, nous utilisons des données au niveau de l'entreprise et montrons que les sociétés américaines rachètent davantage leurs propres actions en période de politique monétaire accommodante, c'est-à-dire lorsque le coût de la dette est faible. En fait, nous montrons que si la courbe de rendement d'une entreprise s'ajuste dans la direction prévue par la politique monétaire, c'est-à-dire que le coût de la dette diminue, l'entreprise émettra davantage d'obligations pour lever des fonds à moindre coût. Cependant, ils vont utiliser la majeure partie de ces nouvelles liquidités pour financer un programme de rachat plutôt que d'investir dans de nouveaux capitaux et emplois. Cet effet d'éviction des rachats sur les nouveaux investissements et l'emploi suscite des doutes car il atténue la transmission de la politique monétaire. / During my PhD I conducted applied macroeconomic research on several different topics, spanning from the effects of job polarization on workers reallocation to the effects of monetary policy on firms capital structure and financial decisions. This thesis collects three articles on these arguments. The main article of the thesis is my job market paper. This work gave me the opportunity to explore in detail the effects of technological change on the occupational structure of labor markets, but also its effects on the reallocation of workers across jobs and the process of sorting skills to jobs. Or in other words, the paper answers these questions: how do workers use the job ladder when technological innovation changes its structure? What are their job opportunities, given their skills, when technology changes? And what skills do employers look for? This argument always intrigued me, and its relevance is raising the attention of governments and policy makers in many developed economics. My research departs from these facts to analyze what are the heterogeneous effects of technological change on workers and firms. In particular, it shows -as already documented in the literature on job polarization- that technological innovation reshapes the occupational structure of the economy by destroying some type of jobs. However I show that, at the same time, technological innovation changes the demand for skills in each occupation such that it has heterogeneous effects across workers in terms of labor mobility, job opportunities and match quality. In particular, this paper is the first to show that technology - by causing the polarization of the labor market- triggers large movements from the top to the bottom of the job ladder, with many workers ending up in lower paying and lower qualifying occupations just after the disruptive effects of technological change were consumed. The effects of technological change on labor market outcomes and dynamics is explored also in the second chapter of this thesis. In particular, this work, joint with Joanne Tan, shows how technological change can explain the raise of occupational shortage. More interestingly, it shows how different segments of the labor market react to occupational shortage. In the last chapter of the thesis, I turn my attention to the relationship of monetary policy and corporate decision of share repurchase. This topic is fully unrelated from the previous one, but I have always been interested on how macro-variables can influence managers decisions at micro level. In this work, joint with Assia Egouace, we use firm-level data and show that American corporations buyback more their own shares in period of accommodating monetary policy, i.e. when the cost of debt is low. In fact we show that if the yield curve of a firm adjusts in the direction predicted by monetary policy, i.e. the corporate cost of debt diminishes, the firm is going to issue more bonds to raise money at lower costs. However, they are going to use most of these new liquidity to finance a repurchase program rather than investing into new capital and employment. This crowding out effect of buybacks on new investment and employment casts doubts since it attenuates the transmission of monetary policy.

The thesis investigates the effects of industrial automation on post-secondary education enrollment. To assess the effects, we build linear regression models to estimate the impact of the surge in the stock of industrial robots on post-secondary enrollment across 50 U.S. states and 41 countries. Drawing upon these estimates and the literature documenting the structural shift in the labor market, we find that recent developments in the fields of automation and robotics have contributed to a shift in demand for post-secondary education, with panel data models that control for both country and time fixed unobservables indicating a significant decline in enrollment for 4-year degree programs internationally.

In this paper, I investigate changes in the job market composition during Sweden’s “Golden Age” between the end of WWII and the 1974 oil crisis to examine to which degree this reflects an earlier job polarization than previously thought and validates that era’s anxieties about automation. Drawing from individual income and occupational data from a representative sample of the Swedish population from the year 1940, 1950, 1960 and 1970 and using the Historical International Standard of Classification of Occupations (HISCO) to make the data sets comparable, I demonstrate a general decrease in the share of blue-collar professionals and a general increase in the share of white-collar professionals, as well as a transition from unskilled to semi-skilled and skilled jobs. This indicates skill-biased technological change as the underlying force in the Swedish economy at the time, refuting Gustavsson’s (2017) previous findings regarding an early Swedish job polarization as well as general claims about deskilling. Lastly, using Acemoglu’s (2017) framework for enabling and replacing technologies, I argue the degree to which the pervasiveness of enabling technologies helped shape the Swedish Golden Age has been underappreciated, carrying lessons for our current era of generation-defining technologies and contemporary discussions surrounding automation.

Les inégalités de revenus et la polarisation de l'emploi ont augmenté dans plusieurs pays au cours des dernières décennies, suscitant des préoccupations d'équité ainsi que des interrogations concernant les politiques de redistribution. Cette thèse répond à deux questions primordiales. La première concerne le rôle des heures travaillées et de leur dispersion pour expliquer les inégalités de revenu; la seconde porte sur le rôle de l'offre de travail des femmes dans l'explication de la polarisation de l'emploi. Le premier chapitre utilise des données pour les États-Unis, le Royaume-Uni, l'Allemagne et la France et examine comment les inégalités de revenu sont affectées par la dispersion des heures de travail. Le principal enseignement de cette approche est que la dispersion des heures de travail peut expliquer plus d'un tiers des inégalités de revenu dans certains pays et que la corrélation entre le salaire horaire et les heures travaillées s'est accrue au fil du temps. Le second chapitre s'appuie sur les résultats du précédent et explore les mécanismes qui expliquent la tendance à la hausse de la corrélation entre salaires et heures travaillées. Nous constatons qu'une plus grande volatilité de la production agrégée et une réglementation plus stricte du marché du travail ont tendance à réduire l'élasticité, alors qu'une augmentation du commerce dans un secteur les augmente. Enfin, le troisième chapitre met l'accent sur le rôle des femmes hautement qualifiées dans l'évolution du marché des substituts de la production domestique et montre que, lorsque les femmes hautement qualifiées travaillent plus d'heures, les femmes moins qualifiées sont plus susceptibles d'être employées. / Earnings inequality and job polarization have increased in a number of countries during the last decades, raising concerns of fairness and fostering debates on the implications for redistributive policies. This thesis asks two main questions. The first concerns the relevance of hours worked and their dispersion for earnings inequality, while the second question investigates the role of female labour supply in explaining the increase in job polarization. The first chapter uses data for the USA, the UK, Germany, and France and examines how earnings inequality is affected by the dispersion of working hours. The main result of this exercise is that hours dispersion can account for over a third of earnings inequality in some countries and that the relevance of the correlation between wages and working hours has been growing over time. The second chapter builds on the results of the previous one and explores the forces behind the upward trend of the correlation between wages and working hours. We find that greater aggregate output volatility and stricter labour market regulation tend to reduce the elasticity, while a greater trade share in an industry raises it. Finally, the third chapter investigates the relevance of female employment for job polarization in Germany. The analysis focuses on the role of high-skilled females in the evolution of a market for home production substitutes and finds that when top-employed females work more hours, low-skilled women are more likely to be employed.

Income inequalities have become a matter of major concern following reports that the working class and lower middle class of developed economies have income levels that are falling behind. Few studies have been conducted on the regional level even though this perspective might better capture the development of income inequalities, since national averages might hide local differences. This study uses panel data for 286 Swedish municipalities in between 1991-2017 and fixed effect regressions, to examine if the theory of a skill-biased technological change could be used to explain resent developments. We find an labor income divergence for Swedish municipalities within the studied time period. The share of high skilled workers is found to be a good predictor of the growth in regional labor income inequalities, while an ageing population of the regions falling behind counteracts the growth of inequality, possibly leading to an underestimation of the size of regional labor income divergence. These results are in support of a skill-biased technological change at work and a job polarization transforming regional labor markets and regional societies. We conclude that adopting a regional perspective in the analysis and development of future economic growth policies is necessary to ensure long term economic growth, equality of opportunity and social cohesion.