The Causes and Consequences of Occupational Decline

Time period: 2018-01-01 to 2020-12-31

Project leader: Georg Graetz

Other personnel: Guy Michaels, Per-Anders Edin

Funder: Forte

Type of award: Unclassified

Total fundning: 3 430 000 SEK

The purpose of this project is to investigate occupational change in Sweden since the 1960s. Technological change (such as the introduction of information and communication technology) may not have reduced the total number of jobs, but it has led to the decline of particular occupations, and this has been costly for the affected workers. Our project’s objectives can be divided into two parts. In the first part we want to identify and characterize the professions that have declined or even disappeared, and evaluate to what extent technological change, international trade, and possibly other factors, are responsible for these declines. In the second part, we want to analyze the impact of occupational decline on the affected workers. How are these workers’ income and future employment affected? What is the effect of occupational decline on early exit from the labor force, for instance through long-term sick leave or early retirement? The project relates to a large literature on the aggregate effects of technological change, and to a much smaller literature on the consequences of occupational decline for individual workers. We will improve on this latter literature by employing population-wide longitudinal micro data covering more than five decades. To estimate the causal effects of occupational decline on individual workers, we will build on, and improve upon, the methods used in existing work on other types of adverse shocks, such as plant closures or increased trade exposure. Our methods will include matching on pre-shock outcomes and a wide range of individual characteristics, and constructing a group of control occupations which were not affected by occupational decline, as well as taking advantage of any regional variation in the rate of occupational decline.