Wage Shocks and the Technological Substitution of Low‐wage Jobs

Bibliographic Data

ID9713395
AuthorsDaniel Aaronson (0000-0002-7197-6639, Federal Reserve Bank of Chicago), Brian J Phelan (DePaul University, corresponding author)
Year2019
Volume129
Issue617
Pages1-34
Publication date2019-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/ecoj.12529
OpenAlexW2581971596
LanguageEN
Citations received12
References cited32

We extend the task‐based empirical framework used in the job polarisation literature to analyse the susceptibility of low‐wage employment to technological substitution. We find that increases in the cost of low‐wage labour, via minimum wage hikes, lead to relative employment declines at cognitively routine occupations but not manually‐routine or non‐routine low‐wage occupations. This suggests that low‐wage routine cognitive tasks are susceptible to technological substitution. While the short‐run employment consequence of this reshuffling on individual workers appears to be economically small, due to concurrent employment growth in other low‐wage jobs, workers previously employed in cognitively routine jobs experience relative wage losses

Economics · Labour economics · Low wage · Substitution (logic · Technological change · Wage · Wage growth · Employment and Welfare Studies · Labor market dynamics and wage inequality · Retirement, Disability, and Employment

Tools

Open DOISci-Hub