Computerizing Industries and Routinizing Jobs: Explaining Trends in Aggregate Productivity / Sangmin Aum, Sang Yoon (Tim) Lee, Yongseok Shin.

Format:

Book

Author/Creator:

Aum, Sangmin.

Contributor:

National Bureau of Economic Research.

Lee, Sang Yoon (Tim).

Shin, Yongseok.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24357.

NBER working paper series no. w24357

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Computerizing Industries and Routinizing Jobs

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

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.

Notes:

Print version record

February 2018.