Skills-Displacing Technological Change and its Impact on Jobs: Challenging Technological Alarmism?

30 Pages Posted: 4 Sep 2019

See all articles by Seamus McGuinness

Seamus McGuinness

Economic and Social Research Institute, Ireland

Konstantinos Pouliakas

Cedefop; University of Aberdeen - Business School; IZA Institute of Labor Economics

Paul Redmond

Economic and Social Research Institute (ESRI)

Abstract

We use data from a new international dataset - the European Skills and Jobs Survey - to create a unique measure of skills-displacing technological change (SDT), defined as technological change that may render workers' skills obsolete. We find that 16 percent of adult workers in the EU are impacted by SDT, with significant variance across countries, ranging from a high of 28 percent in Estonia, to below seven percent in Bulgaria. Despite claims that technological change contributes to the deskilling of jobs, we present evidence that SDT is associated with dynamic upskilling of workers. The paper also presents the first direct micro-evidence of the reinstatement effect of automating technology, namely a positive contribution of automation to the task content and skills complexity of the jobs of incumbent workers. Despite the recent focus on the polarising impact of automation and associated reskilling needs of lower-skilled individuals, our evidence also draws attention to the fact that SDT predominantly affects higher-skilled workers, reinforcing inequalities in upskilling opportunities within workplaces. Workers affected by SDT also experience greater job insecurity.

Keywords: technological change, automation, skills, tasks, skill mismatch, skills obsolescence

JEL Classification: J24, O33, O31

Suggested Citation

McGuinness, Seamus and Pouliakas, Konstantinos and Redmond, Paul, Skills-Displacing Technological Change and its Impact on Jobs: Challenging Technological Alarmism?. IZA Discussion Paper No. 12541, Available at SSRN: https://ssrn.com/abstract=3445807

Seamus McGuinness (Contact Author)

Economic and Social Research Institute, Ireland ( email )

Dublin 4
Ireland

HOME PAGE: http://www.esri.ie/about_us/staff/view_all_staff/view/index.xml?id=1040

Konstantinos Pouliakas

Cedefop ( email )

PO Box 22427
Finikas (Thessaloniki), 55102
Greece

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Paul Redmond

Economic and Social Research Institute (ESRI) ( email )

Whitaker square Sir john Rogerson's Quay
Dublin 2
Dublin
Ireland

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