Is Modern Technology Responsible for Jobless Recoveries?

By Georg Graetz, Guy Michaels. Social Science Research Network, 2017

123 citations recorded by the source corpus.

Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. One possible explanation for these "jobless" recoveries is rooted in technological change: middle-skill jobs, often involving routine tasks, are lost during recessions, and the displaced workers take time to transition into other jobs (Jaimovich and Siu, 2014). But technological replacement of middle-skill workers is not unique to the US – it also takes place in other developed countries (Goos, Manning, and Salomons, 2014). So if jobless recoveries in the US are due to technology, we might expect to also see them elsewhere in the developed world. We test this possibility using data on recoveries from 71 recessions in 28 industries and 17 countries from 1970-2011. We find that though GDP recovered more slowly after recent recessions, employment did not. Industries that used more routine tasks, and those more exposed to robotization, did not recently experience slower employment recoveries. Finally, middle-skill employment did not recover more slowly after recent recessions, and this pattern was no different in routine-intensive industries. Taken together, this evidence suggests that technology is not causing jobless recoveries in developed countries outside the US.

Subfields: Economics and Econometrics, General Health Professions

View Paper: https://www.semanticscholar.org/paper/7685b6c3d35fa0d2bd6d73b87d628638e9841a8d

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Citations in the corpus

Job Polarization and Jobless Recoveries (2020, background): “Graetz and Michaels (2017) consider industry-level (as opposed to occupation-level) data in the same international sample.”
Robots at Work (2015, unknown): “Nevertheless, as another recent paper of ours (Graetz & Michaels, 2017) suggests, our results may still be compatible with theirs if the effects of new technologies such as robots are different in the United States.”
German Robots - The Impact of Industrial Robots on Workers (2017, methodology): “We merge detailed German labor mar ket data with the same data on industrial robots that is also used by ar and in the pio neering study by Graetz and Michaels (2016, 2017) who exploit industry-level variation across countries.”
Corporate Zombies: Anatomy and Life Cycle (2020, background): “…in the share of zombie firms could also be a factor behind the slowdown in the speed of post-recession output recovery found by Gali et al (2012) and Graetz and Michaels (2017) as well as the slow pace of reallocation of resources in the wake of the GFC highlighted by Foster et al. (2017). losses.”
New Perspectives on the Decline of US Manufacturing Employment (2018, background): “Investigating the US steel industry, Oster (1982) shows that large US producers were relatively slow in adopting new blast-furnace technologies during the 1970s, a factor which may have contributed to the rise in steel imports from their faster-adopting Japanese rivals.”