After Recessions, Why Do Some Jobs Disappear Forever?


Knowledge@Wharton: There are two things that I found quite interesting in your paper that I want to highlight for a minute. One is the finding that 88% of job losses in the so-called “routine” occupations — such as bank tellers, manufacturing plant jobs, and office clerks — happened during economic downturns, and this is a trend that has been going on since the mid-1980s. Interestingly, this was also around the same time when innovation and automation started to pick up. These two seem to be correlated. Are they?

Roussanov: This is exactly the main empirical fact that our model aims to explain or at least understand. We were not the ones who documented this fact, but this has become an important piece of information for macroeconomists to wrap our heads around — the fact that this job polarization process seems to be primarily happening during relatively short periods of time, which are recessions.

The complete article

Knowledge@Wharton

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