The Change of Job Opportunities: The Role of Computerization and Institutions

Abstract:     
This paper studies the pattern of job opportunities over the last two decades in European countries. We find that the share of high-skilled jobs have been expanding over time, while the share of medium-skilled jobs have been declining. These changes are in line with the US patterns and, according to the previous literature, they come from recent technological changes. However, our data show an interesting didifference between the US and Europe: differently from the US, in Europe there is not any increase in the share of low-skilled employment. Moreover, we find that the didifference between the proportions of employment hired in low-skilled and medium-skilled jobs is negatively correlated with both the unemployment rate and the degree of employment protection in the labor market.

We propose a theoretical model to study the effects of a technological shock on the employment structure in a unionized economy. By accounting for the collective bargaining process, our model may fitContinental Europe better than the ones found in the literature. We conclude that the definition of the union policy is crucial in order to explain observed cross-country heterogeneity in low-skilled employment.

Number of Pages in PDF File: 23

Keywords: Technological change, Institutions, Employment, Europe

JEL Classification: J2, J51, O3

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