Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings

Brad Hershbein, Lisa B. Kahn

NBER Working Paper No. 22762
Issued in October 2016, Revised in September 2017
NBER Program(s):EFG, LS, PR

We show that skill requirements in job vacancy postings differentially increased in MSAs that were hit hard by the Great Recession, relative to less hard-hit areas. These increases persist through at least the end of 2015 and are correlated with increases in capital investments, both at the MSA and firm-levels. We also find that effects are most pronounced in routine-cognitive occupations, which exhibit relative wage growth as well. We argue that this evidence is consistent with the restructuring of production toward routine-biased technologies and the more-skilled workers that complement them, and that the Great Recession accelerated this process.

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Document Object Identifier (DOI): 10.3386/w22762

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