What impact has technological change had on job markets since the computer revolution of the 1980s, and how will machine learning and robotics impact on the future of work?
A new report from Carl Frey, Co-Director of the Oxford Martin Programme on Technology and Employment, and his colleague Thor Berger, gives a comprehensive overview of the subject of job automation as it affects OECD countries, and considers how policymakers might prepare for its potential impact.
The report for the OECD, Digitalisation, Deindustrialisation and the Future of Work, provides a systematic review of the literature examining the impact of digitalisation on OECD labour markets, and seeks to shed light on current debates around the impact of new technology, faltering productivity growth and the ‘hollowing out’ of job markets.
The spread of digital technologies has had pervasive effects on labour markets across the OECD, the authors say, with a growing body of research showing that technological change since the computer revolution has increased the demand for cognitive skills, reduced the demand for workers performing routine tasks, and contributed to the declining labour share of national income.
They show that over the course of the twentieth century, technological change has favoured relatively skilled workers: a trend that has accelerated since the 1980s. As routine jobs have disappeared, labour markets throughout the OECD economies have experienced a “hollowing out”, with significant expansions of employment at both ends of the skill spectrum. Importantly, say Frey and Berger, a large body of work documents that these shifts are directly accounted for by the spread of computer technology, rather than factors such as offshoring, low-skill immigration, trade, or a secular decline in manufacturing employment.
And while Carl Frey and Michael Osborne’s 2013 working paper, The Future of Employment, predicted that up to 47% of jobs would be at risk of automation over the coming two decades, new digital technologies have not proved to be an engine of job creation, with just 0.5 percent of the US workforce employed in digital industries that emerged throughout the 2000s.
Industries where most job growth has taken place, they say, is in technologically stagnant sectors of the economy, including health care, government and personal services, but warn that the expanding scope of automation could soon transform these areas, too.
Looking at the implications for policymakers, they discuss the roles of education, the labour market, and tax policy in exploiting the opportunities and responding to the challenges brought by technological change, particularly emphasising the need to invest in upgrading workers’ skills.