The Department of Economics receives research grant from Forte

2017-10-31

One of the projects at Uppsala University, which received fundings from Forte, is "The Causes and Consequences of Occupational Decline", a research project conducted by Georg Graetz. The project was awarded a grant of 3 430 000 SEK and will last for three years.

Georg Graetz

Georg Graetz obtained his PhD in Economics at London School of Economics and is currently a researcher at the Department of Economics.

The project participants include Per-Anders Edin and Sofia Hernnäs, Professor and PhD student, respectively, at Uppsala University as well as Guy Michaels, Associate Professor at the London School of Economics.

– Over the last 200 years, new technologies have led to large increases in living standards. While the overall number of jobs and labor market participation have not declined during this time, there has been a continuous transformation of the labor market. Many occupations have declined or even disappeared – think for instance of bank tellers or switchboard operators. Existing occupations have grown (waitresses/waiters, health care workers), and new jobs have emerged (programmers, airline pilots). Our project seeks to understand the consequences of technological replacement for individual workers. If you started your career in a job that would soon be replaced by technology, how did this affect your employment, earnings, and other outcomes over the course of your career? To address this question, we use data on the entire Swedish population from 1960-2010, says Georg Graetz.

Abstract

The purpose of this project is to investigate occupational change in Sweden since the 1960s. Technological change (such as the introduction of information and communication technology) may not have reduced the total number of jobs, but it has led to the decline of particular occupations, and this has been costly for the affected workers. Our project’s objectives can be divided into two parts. In the first part we want to identify and characterize the professions that have declined or even disappeared, and evaluate to what extent technological change, international trade, and possibly other factors, are responsible for these declines. In the second part, we want to analyze the impact of occupational decline on the affected workers. How are these workers’ income and future employment affected? What is the effect of occupational decline on early exit from the labor force, for instance through long-term sick leave or early retirement?

The project relates to a large literature on the aggregate effects of technological change, and to a much smaller literature on the consequences of occupational decline for individual workers. We will improve on this latter literature by employing population-wide longitudinal micro data covering more than five decades. To estimate the causal effects of occupational decline on individual workers, we will build on, and improve upon, the methods used in existing work on other types of adverse shocks, such as plant closures or increased trade exposure. Our methods will include matching on pre-shock outcomes and a wide range of individual characteristics, and constructing a group of control occupations which were not affected by occupational decline, as well as taking advantage of any regional variation in the rate of occupational decline.

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