The "End of Men" and Rise of Women in the High-Skilled Labor Market
by Guido Matias Cortes, Nir Jaimovich, Henry E. Siu
Abstract:
We document a new finding regarding changes in labor market outcomes for men and women in the US. Since 1980, conditional on being a college-educated man, the probability of working in a cognitive/high-wage occupation has fallen. This contrasts starkly with the experience for college-educated women: their probability of working in these occupations rose, despite a much larger increase in the supply of educated women relative to men. We consider these facts in light of a general neoclassical model of the labor market. One key channel capable of rationalizing these findings is a greater increase in the demand for female-oriented skills in cognitive/high-wage occupations relative to other occupations. Using occupation-level data, we find evidence that this relative increase in the demand for female skills is due to an increasing importance of social skills within such occupations. Evidence from both male and female wages is also indicative of an increase in the demand for social skills.
More at NBER.
Extract:
The figure seems to indicate a positive correlation between these
variables. For instance, the Seattle, Denver, Anchorage, and San Diego
MSAs, which had relatively higher real incomes in 1970, experienced high
population growth over the period. On the other hand, the Detroit,
Philadelphia, and Pittsburgh MSAs, which had lower real incomes in 1970,
seem to have experienced lower (negative) population growth. Not all
cities exhibit the positive correlation, however. The Atlanta, Houston,
and Dallas MSAs had low average real incomes in 1970 yet experienced
high population growth over the period. Incomes in these MSAs, however,
have grown rapidly since 1970, which could be a main reason for the
population growth.
Read the entire synopsis here. Complete analysis in PDF.
From the new NBER working paper by Anton Korinek, Joseph E. Stiglitz titled, "Artificial Intelligence and Its Implications for Income Distribution and Unemployment."
Abstract:
Inequality is one of the main challenges posed by the proliferation of artificial intelligence (AI) and other forms of worker-replacing technological progress. This paper provides a taxonomy of the associated economic issues: First, we discuss the general conditions under which new technologies such as AI may lead to a Pareto improvement. Secondly, we delineate the two main channels through which inequality is affected - the surplus arising to innovators and redistributions arising from factor price changes. Third, we provide several simple economic models to describe how policy can counter these effects, even in the case of a "singularity" where machines come to dominate human labor. Under plausible conditions, non-distortionary taxation can be levied to compensate those who otherwise might lose. Fourth, we describe the two main channels through which technological progress may lead to technological unemployment via efficiency wage effects and as a transitional phenomenon. Lastly, we speculate on how technologies to create super-human levels of intelligence may affect inequality and on how to save humanity from the Malthusian destiny that may ensue.
Read the whole working paper here. (Gated)
An argument for Massachusetts as the site for Amazon's second headquarters. (Subscription required).
From the new NBER working paper by Justin Caron, Thibault Fally and James Markusen, "Per Capita Income and the Demand for Skills,"
Almost all of the literature about the growth of income inequality and the relationship between skilled and unskilled wages approaches the issue from the production side of general equilibrium (skill-biased technical change, international trade). Here, we add a role for income-dependent demand interacted with factor intensities in production. We explore how income growth and trade liberalization influence the demand for skilled labor when preferences are non-homothetic and income-elastic goods are more intensive in skilled labor, an empirical regularity documented in Caron, Fally and Markusen (2014). In one experiment, counterfactual simulations show that sector neutral productivity growth, which generates shifts in consumption towards skill-intensive goods, leads to significant increases in the skill premium: in developing countries, a one percent increase in productivity leads to a 0.1 to 0.25 percent increase in the skill premium. In several countries, including China and India, simulations suggest that the historical growth experienced in the last 25 years may have led to an increase in the skill premium of more than 10%. In a second experiment, we show that trade cost reductions generate quantitatively very different outcomes once we account for non- homothetic preferences. These imply substantially less predicted net factor content of trade and allow for a shift in consumption patterns caused by trade-induced income growth. Overall, the negative effect of trade cost reductions on the skill premium predicted for developing countries under homothetic preferences (Stolper-Samuelson) is strongly mitigated, and sometimes reversed.
Or to put in other words:
We provide a quantitative assessment of a simple yet overlooked mechanism: growth in income increasingly shifts consumption patterns towards goods and services that require relatively more skilled labor in their production.
Read more here. (Gated)
