Computerizing Industries and Routinizing Jobs: Explaining Trends in Aggregate Productivity

Aum, Sangmin, Lee, Tim and Shin, Yongseok (2018) Computerizing Industries and Routinizing Jobs: Explaining Trends in Aggregate Productivity. TSE Working Paper, n. 18-893, Toulouse

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Official URL: http://tse-fr.eu/pub/32481

Abstract

Aggregate productivity growth in the U.S. has slowed down since the 2000s. We quantify the importance of differential productivity growth across occupations and across industries, and the rise of computers since the 1980s, for the productivity slowdown. Complementarity across occupations and industries in production shrinks the relative size of those with high productivity growth, reducing their contributions toward aggregate productivity growth, resulting in its slowdown. We find that such a force, especially the shrinkage of occupations with above-average productivity growth through \routinization," was present since the 1980s. Through the end of the 1990s, this force was countervailed by the extraordinarily high productivity growth in the computer industry, of which output became an increasingly more important input in all industries (\computerization"). It was only when the computer industry's productivity growth slowed down in the 2000s that the negative effect of routinization on aggregate productivity became apparent. We also show that the decline in the labor income share can be attributed to computerization, which substitutes labor across all industries.

Item Type: Monograph (Working Paper)
Language: English
Date: February 2018
Place of Publication: Toulouse
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 24 Apr 2018 09:45
Last Modified: 15 Jul 2019 13:36
OAI ID: oai:tse-fr.eu:32481
URI: http://publications.ut-capitole.fr/id/eprint/25858

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