The price of polarization: Estimating task prices under routine‐biased technical change

Abstract

This paper proposes a new approach to estimate task prices per efficiency unit of skill in the Roy model. I show how the sorting of workers into tasks and their associated wage growth can be used to identify changes in task prices under relatively weak assumptions. The estimation exploits the fact that the returns to observable talents will change differentially over time depending on the changes in prices of those tasks that they predict workers to sort into. In the generalized Roy model, also the average non-pecuniary amenities in each task are identified. I apply this approach to the literature on routine-biased technical change, a key prediction of which is that task prices should polarize. Empirical results for male workers in U.S. data indicate that abstract and manual tasks' relative prices indeed increased during the 1990s and 2000s. as well as participants at various seminars for very helpful comments.

The "End of Men" and Rise of Women in the High-Skilled Labor Market

“…Note that this analysis is related to the literature that aims to estimate the return to tasks across occupations (e.g Gottschalk, Green, and Sand 2015;Cortes 2016;Böhm 2016;Fortin and Lemieux 2016)…”

Returns to Routine Job Tasks in the German Labour Market: An Instrumental Variables Approach

“…Other approaches: In a recent study, Böhm (2020) employs a propensity method to estimate changing task prices in the U.S. He distinguishes between abstract, manual and routine intensive occupations and estimates the changing prices paid for a unit of labour in these occupations.…”

Tâches, professions et salaires dans les pays de l'OCDE

“…Quelques études récentes utilisent plutôt des données de panel. Il faut citer ici celle de Gottschalk, Green et Sand (2016) et celle de Böhm (2017), qui portent sur des données issues d'enquêtes menées aux États-Unis (la Current Population Survey pour la première et la National Longitudinal Survey of Youth pour la seconde), ainsi que celle de Cavaglia et Etheridge (2017), qui fait appel aux données d'une enquête britannique, la Household Panel Survey, et d'une enquête allemande, le German Socio-Economic Panel (SOEP). Les données de panel permettent de tenir compte de l'hétérogénéité non observée entre les travailleurs et de corriger les effets de sélection découlant du fait que les individus se dirigent naturellement vers les professions faisant appel aux tâches qu'ils sont particulièrement aptes à effectuer.…”