Omar Licandro
Research project
Skill Obsolescence
Project summary
Technical progress destroys and creates skills, reducing employment and wages for middle-skilled occupations and raising them for high-skilled occupations. Workers losing their jobs can then move to occupations at the bottom of the skill distribution, which operate as a refuge for displaced workers. This is what we call the skill obsolescence hypothesis. This project will use Autor and Dorn (2013) data to provide evidence on it. The skill obsolescence hypothesis is highly related to structural change and capital-skill complementarity theories too. Production occupations, in the middle of the skill distribution and mainly associated with manufacturing, were negatively affected by skill obsolescence in the last decades. At the same time, high-skilled service occupations benefited the most from it, with low-skill service occupations acting as refuge occupations. This project will develop a model of structural change and occupational choice consistent with the skill obsolescence hypothesis.
