why are there still so many jobs the history and future of workplace automation in this essay i begin by identifying the reasons that automation has not wiped out a majority of jobs over the decades and centuries automation does indeed substitute for labor as it is typically intended to do however automation also complements labor raises output in ways that leads to higher demand for labor and interacts with adjustments in labor supply journalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity raise earnings and augment demand for labor changes in technology do alter the types of jobs available and what those jobs pay in the last few decades one noticeable change has been a polarization of the labor market in which wage gains went disproportionately to those at the top and at the bottom of the income and skill distribution not to those in the middle however i also argue this polarization is unlikely to continue very far into future the final section of this paper reflects on how recent and future advances in artificial intelligence and robotics should shape our thinking about the likely trajectory of occupational change and employment growth i argue that the interplay between machine and human comparative advantage allows computers to substitute for workers in performing routine codifiable tasks while amplifying the comparative advantage of workers in supplying problem solving skills adaptability and creativity

the great reversal in the demand for skill and cognitive tasks this paper argues that several of the poor labor market outcomes observed in the great recession can be traced back to a change in the demand pattern for skilled workers that started with the tech bust of 2000 in particular we show that around the year 2000 the demand for cognitive tasks underwent a reversal in response high skilled workers moved down the occupational ladder and increasingly displaced lower educated workers in less skill intensive jobs while these effects were present before the financial crisis of 2008 they became more obvious after jobs associated with the housing bubble disappeared

wages experience and seniority in this paper we study the sources of wage growth we identify the contribution to such growth of general sector specific and firm specific human capital our results are interpretable within the context of a model where the returns to human capital may be heterogeneous and where firms may offer different combinations of entry level wages and firm specific human capital development we allow for the possibility that wages are match specific and that workers move jobs as a result of identifying a better match to estimate the average returns to experience sector tenure and firm specific tenure within this context we develop an identification strategy which relies on the use of firm closures our data source is a new and unique administrative data set for germany that includes complete work histories as well as individual characteristics we find positive returns to experience and firm tenure for skilled workers the returns to experience for unskilled workers are small and insignificant after 2 years of experience their returns to sector tenure are also zero however their returns to firm tenure are substantial in this paper we study the growth of wages of young workers in germany knowing the extent and reasons for individual wage growth over the life cycle is important for a number of areas in economics just to mention two examples first it is a key element to understanding and designing active labour market programmes many such programmes offer temporary and often subsidized work opportunities examples are the new deal in the u k and the swedish programmes as well as a number of programmes in germany these programmes are based on the assumption that general skills are sufficiently enhanced while working so as to render the workers employable without a wage subsidy thus the success of these programmes depends on how skills improve on the job for the target population and whether this skill enhancement is transferable across jobs second it is a key to understanding the benefits and costs of job mobility this in turn matters for a number of policy issues including the design of pension policies relating for example to final salary schemes as a result of this widespread interest a large body of empirical research has focused on obtaining estimates for the returns of experience and seniority 1 our study uses a new and unique administrative data set with a number of features that are important for our analysis and allow us to avoid many problems encountered in earlier work in this field in our model wages grow due to learning by doing which may be heterogeneous across individuals moreover since firms offer different career profiles and because we allow for match specific effects on wages investments take the form of searching for the firm with the most desirable learning by doing characteristics career structure 2

trends in the transitory variance of male earnings methods and evidence we estimate the trend in the transitory variance of male earnings in the united states using the michigan panel study of income dynamics from 1970 to 2004 using an error components model and simpler but only approximate methods we find that the transitory variance started to increase in the early 1970s continued to increase through the mid 1980s and then remained at this new higher level through the 1990s and beyond thus the increase mostly occurred about 30 years ago its increase accounts for between 31 and 49 percent of the total rise in cross sectional variance depending on the time period

forming coalitions and the shapley ntu value a simple protocol for coalition formation is presented first an order of the players is randomly chosen then a coalition grows by sequentially incorporating new members in this order the protocol is studied in the context of non transferable utility ntu games in characteristic function form if weighted utility transfers are feasible when everybody cooperates then the expected subgame perfect equilibrium payoff allocation anticipated before any implemented game is the shapley ntu value

technological change occupational tasks and declining immigrant outcomes implications for earnings and income inequality in canada the earnings and occupational task requirements of immigrants to canada are analyzed the growing education levels of immigrants in the 1990s have not led to a large improvement in earnings as one might expect if growing computerization and the resulting technological change was leading to a rising return to non routine cognitive skills and a greater wage return to university education controlling for education we find a pronounced cross arrival cohort decline in earnings that coincided with cross cohort declines in cognitive occupational task requirements and cross cohort increases in manual occupational task requirements the immigrant earnings outcomes had only a small effect on overall canadian earnings inequality resume changement technique t ches occupationnelles et resultats declinants pour les immigrants implications pour l inegalite des gains et des revenus au canada les auteurs analysent les gains et les prerequis des t ches occupationnelles des immigrants les niveaux d education croissants des immigrants dans les annees 1990 n ont pas entraine une grande amelioration dans les gains comme on aurait pu s y attendre si l informatisation accrue et les changements techniques qui s ensuivent ont entraine un rendement croissant sur des habiletes cognitives non routinieres et un rendement salarial plus grand sur l education universitaire normalisant pour le niveau d education on decouvre un declin entre cohortes dans les gains qui coincide avec un declin dans ce que reclament les t ches en termes d habiletes cognitives et un accroissement de ce que reclament les occupations manuelles l effet de ces changements sur les gains des immigrants n a eu qu un faible impact sur l inegalite des gains au canada

structural transformation and the rise of information technology abstract has the emergence of information technology changed the structure of employment and earnings in the us we propose a new index of occupation level it intensity and document several long term changes in the occupational landscape over the past decades using census and us klems micro data we show that i the bulk of productivity growth after 1950 is concentrated in it intensive sectors ii the share of workers in it jobs has expanded significantly with little or no pause and it jobs enjoy a large and growing earnings premium even after controlling for general task requirements e g cognitive non routine and iii the rise of the it intensive employment share is closely associated with declines in the manufacturing employment share while earnings premia for college educated and cognitive non routine workers have flattened in the aggregate since 2000 we show that they continued growing in it intensive jobs and that these jobs have played a key role in accounting for the surge of high tech service labor productivity we also use our it intensity index to estimate industry specific elasticities of substitution between it and non it intensive labor finding values of 1 6 in manufacturing and 1 3 in services finally we revisit a long standing question about the relationship between technological progress and productivity and provide evidence that occupation level it intensity is positively associated with output growth especially in the services sector

waking up from the american dream on the experience of young americans during the housing boom of the 2000s we exploit regional variations in house price fluctuations in the united states during the early to mid 2000s to study the impact of the housing boom on young americans choices related to home ownership household formation and fertility we also introduce a novel instrument for changes in house prices based on the predetermined industrial structure of the local economy we find that in regions that experienced large increases in house prices between 2001 and 2006 the youngest households were substantially less likely to purchase residential property to be married and to have a child both in 2006 and in 2011

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

reinterpreting the kernel the reduced game relevant for the consistency of the prekernel is used to reinterpret this solution concept in a way that makes it independent of interpersonal utility comparisons based on this reinterpretation a non cooperative model is presented that yields in stationary equilibria the prekernel kernel for the class of monotonic transferable utility games next we apply the same non cooperative model to more general coalitional games for pure bargaining problems the model yields the nash solution for general non transferable utility games a natural extension of the prekernel arises thus the prekernel is obtained as the set of payoffs where the relevant bargaining range between every pair of players is split in half journal of economic literatureclassification numbers c71 c72 c78

endogenous trade bloc formation in an asymmetric world this paper investigates how variations in endowments and the structure of preferences impact on the coalition formation decisions of asymmetric countries there exist relatively few general results on the relationship between country characteristics and trade bloc formation here new light is shed on this issue by systematically simulating bloc formation and by explicitly analysing the blocking behaviour of coalitions a general equilibrium model of world trade is implemented with equilibrium coalition formation being modelled using the equilibrium concept of the core it is found that global free trade is observed when all countries are similar customs unions tend to form between countries with adjacent consumer preferences or with adjacent endowments of their export commodity finally in contrast to the existing literature but consistent with observed behaviour it is found that free trade areas often pareto dominate customs unions provided consumer preferences differ sufficiently

measuring the strength of cointegration and granger causality this study uses poskitt and tremayne s 1987 posterior odds ratio test and the associated model portfolio approach to measure the strength of the evidence from cointegration and granger causality tests as an illustration of the methodology the bivariate relationship between money and income in canada is re examined using historical data

the specification of econometric strike models a varma approach in the case of macro econometric strike models classical regression techniques do not deal with important specification issues 1 the question of causality between strikes and other variables 2 the choice of appropriate lag structures and 3 omitted variable bias moreover since rational bargainers would tend to avoid previous bargaining mistakes the determinants of strike activity in a given period may not apply in subsequent periods this study attempts to model post war us strike behaviour beacuse of the spurious regression problems vector autoregressive moving average varma techniques are preferred to standard regression methods for the early post war period strikes are successfully modelled in terms of unemployment and wage and price inflation there is no feedback from strikes to the other variables contrary to the predominant view that us strikes are more frequent when real wage increases are small increasing rates of wage change both real and nominal lead to more strikes for t

occupational mobility and wage inequality in this article we argue that wage inequality and occupational mobility are intimately related we are motivated by our empirical findings that human capital is occupation specific and that the fraction of workers switching occupations in the u s was as high as 16 a year in the early 1970 s and had increased to 21 by the mid 1990 s we develop a general equilibrium model with occupation specific human capital and heterogeneous experience levels within occupations we find that the model calibrated to match the level of occupational mobility in the 1970 s accounts quite well for the level of within group wage inequality in that period next we find that the model calibrated to match the increase in occupational mobility accounts for over 90 of the increase in wage inequality between the 1970 s and the 1990 s the theory is also quantitatively consistent with the level and increase in the short term variability of earnings copyright wiley blackwell

the value allocation of an economy with differential information we analyze the shapley value allocation of an economy with differential information since the intent of the shapley value is to measure the sum of the expected marginal contributions made by an agent to any coalition that he she belongs to the value allocation of an economy with differential information provides an interesting way to measure the information advantage of an agent this feature of the shapley value allocation is not necessarily shared by the rational expectation equilibrium thus we analyze the informational structure of an economy with differential information from a different and new viewpoint

occupational specificity of human capital we find that returns to occupational tenure are substantial everything else being constant 5 years of occupational tenure are associated with an increase in wages of 12 20 moreover when occupational experience is taken into account tenure with an industry or employer has relatively little importance in accounting for the wage one receives this finding is consistent with human capital being occupation specific

the declining fortunes of the young since 2000 abstract we document that successive cohorts of college and post college degree graduates experienced an increase in the probability of obtaining cognitive jobs both at the start of their careers and with time in the labor market in the 1990s however this pattern reversed for cohorts entering after 2000 profiles of the proportion of a cohort in cognitive occupations since school completion fall and become flatter with successive cohorts since cohort wage profiles display a similar pattern these findings appear to fit with a strong increase in demand for cognitive tasks in the 1990s followed by a decline in the 2000s

a casual varma model analysis with an application to canadian money and income data 1988 a casual varma model analysis with an application to canadian money and income data applied economics vol 20 no 9 pp 1167 1183

the growing importance of social skills in the labor market the labor market increasingly rewards social skills between 1980 and 2012 jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the u s labor force math intensive but less social jobs including many stem occupations shrank by 3 3 percentage points over the same period employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills to understand these patterns i develop a model of team production where workers trade tasks to exploit their comparative advantage in the model social skills reduce coordination costs allowing workers to specialize and work together more efficiently the model generates predictions about sorting and the relative returns to skill across occupations which i investigate using data from the nlsy79 and the nlsy97 using a comparable set of skill measures and covariates across survey waves i find that the labor market return to social skills was much greater in the 2000s than in the mid 1980s and 1990s

a varma analysis of the causal relations among stock returns real output and nominal interest rates previous research has documented a negative relation between common stock returns and inflation recently fama 3 and geske and roll 6 have argued that this relation results from a more fundamental one between real activity and expected inflation stock returns they argue signal changes in real activity which in turn affect expected inflation however unlike fama geske and roll argue that changes in real activity result in changes in money supply growth which in turn affect expected inflation empirical tests have analyzed separately each link in the proposed causal chain in this article we investigate simultaneously the relations among stock returns real activity inflation and money supply changes using a vector autoregressive moving average varma model our empirical results strongly support geske and roll s reversed causality model there have been many attempts to explain the negative relations observed between stock returns and expected inflation changes in expected inflation and unexpected inflation 1 these phenomena documented by fama and schwert 5 are troublesome because they appear contrary both to fisher s theory that nominal asset returns are positively related to expected inflation and to received wisdom that common stocks are hedges against expected as well as unexpected inflation fama 3 suggests an explanation for the observed negative relation between stock returns and inflation based on money demand theory an increase in anticipated real activity leads he argues to an increase in the demand for real money balances given the level of nominal money the increased demand for real money balances must be accommodated by a fall in the price level because stock returns are assumed to be positively related to expected future real activity a negative relation between inflation and stock returns is induced however this negative relation is merely a proxy for the more fundamental relation between anticipated real activity and stock returns therefore fama argues that the observed relation between stock returns and inflation is spurious as noted by fama and others this line of reasoning cannot explain completely the negative relation between stock returns and inflation fama finds that measures of unexpected inflation are significant determinants of monthly stock returns in regressions where anticipated real activity is included as an explanatory variable in addition the explanatory power of expected inflation is eliminated

are causal relationships sensitive to causality tests 1987 are causal relationships sensitive to causality tests applied economics vol 19 no 4 pp 459 465