The great reversal in the demand for skill and cognitive tasksISER External Seminars

What explains the current low rate of employment in the US? While there
has been substantial debate over this question in recent years, we believe that
considerable added insight can be derived by focusing on changes in the labor
market at the turn of the century. In particular, we argue that in about the
year 2000, the demand for skill (or, more speci�cally, for cognitive tasks often
associated with high educational skill) underwent a reversal. Many researchers
have documented a strong, ongoing increase in the demand for skills in the
decades leading up to 2000. In this paper, we document a decline in that
demand in the years since 2000, even as the supply of high education workers
continues to grow. We go on to show that, in response to this demand reversal,
high-skilled workers have moved down the occupational ladder and have begun
to perform jobs traditionally performed by lower-skilled workers. This de-
skilling process, in turn, results in high-skilled workers pushing low-skilled
workers even further down the occupational ladder and, to some degree, out
of the labor force all together. In order to understand these patterns, we o�er
a simple extension to the standard skill biased technical change model that
views cognitive tasks as a stock rather than a
ow. We show how such a
model can explain the reversal in the data that we present, and o�ers a novel
interpretation of the current employment situation in the US.

Presented by:

David Green (University of British Columbia)

Date & time:

18 Nov 2013 16:00 pm - 18 Nov 2013 17:30 pm

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