Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 years
OECD labor markets have become more "polarized" with employment in the middle of the skill distribution falling relative to the top and (in recent years) also the bottom of the skill distribution. We test the hypothesis of Autor, Levy, and Murnane (2003) that this is partly due to information and communication technologies (ICT) complementing the analytical tasks primarily performed by highly educated workers and substituting for routine tasks generally performed by middle educated workers (with little effect on low educated workers performing manual non-routine tasks). Using industry level data on the US, Japan, and nine European countries 1980-2004 we find evidence consistent with ICT-based polarization. Industries with faster growth of ICT had greater increases in relative demand for high educated workers and bigger falls in relative demand for middle educated workers. Trade openness is also associated with polarization, but this is not robust to controls for technology (like R&D). Technologies can account for up to a quarter of the growth in demand for the college educated in the quarter century since 1980.
We thank David Autor, Tim Brenahan, David Dorn, Liran Einav, Maarten Goos, Larry Katz, Paul Krugman, Alan Manning, Denis Nekipelov, Stephen Redding, Anna Salomons, and seminar participants at various universities for extremely helpful comments. David Autor kindly provided the data on routine tasks. Finance was provided by the ESRC through the Centre for Economic Performance. This paper is part of the SCIFI-GLOW Collaborative Project supported by the European Commission's Seventh Research Framework Programme, Contract number SSH7-CT-2008-217436. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
“Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 Years” (with Guy Michaels and Ashwini Natraj), CEP Discussion Paper No. 987. Forthcoming , Review of Economi cs and Statistics March 2014, Vol. 96, No. 1, Pages 60-77