Wage shocks and the technological substitution of low-wage jobs

Arbeitspapier

We extend the task-based empirical framework used in the job polarization literature to analyze the susceptibility of low-wage employment to technological substitution. We find that increases in the cost of low-wage labor, via minimum wage hikes, lead to relative employment declines at cognitively routine occupations but not manually-routine or non-routine low-wage occupations. This suggests that low-wage routine cognitive tasks are susceptible to technological substitution. While the short-run employment consequence of this reshuffling on individual workers is economically small, due to concurrent employment growth in other low-wage jobs, workers previously employed in cognitively routine jobs experience relative wage losses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Upjohn Institute Working Paper ; No. 17-266

Classification and Topics

• Classification: Wirtschaft ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wages, Compensation, and Labor Costs: Public Policy
• Subject: technological substitution ; routine tasks ; minimum wage

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Aaronson, Daniel ; Phelan, Brian J.
• Event: Veröffentlichung
• (who): W.E. Upjohn Institute for Employment Research
• (where): Kalamazoo, MI
• (when): 2016

Further information

• DOI: doi:10.17848/wp17-266
• Handle: http://hdl.handle.net/10419/172228
• Last update: 10.03.2025, 11:45 AM CET