A sea change?

This has to be quick, but two things struck me this week, each of which is either ominous, hopeful, or some combination of the two.

1.) In Autor and Acemoglu’s (2010) review of the literature on skills, tasks, technology and wages, they do something I haven’t seen in the labor literature before – they build a model which explicitly sets the productivity of human capital, technology/machinery and offshoring in competition for the favor of employers.

This approach reflects Acemoglu’s (2002) argument that technology is not some exogenous thing that enters the labor market out of the blue, but rather has been used in different ways, at different times, depending on its ability to maximize profits. The analogy to Braverman is obvious, and in fact Acemoglu draws on Braverman’s historical analysis in his discussion of this.

2.) While I have to confess that I haven’t read the full paper yet, I was struck by the conclusions in Spence and Hlatshwayo’s new white paper for the CFR, in which they conclude that the driver of falling wages in the US has been the shift in the types of jobs on offer. This is another powerful argument against claims that there is some “skills mismatch” due to the deficiencies of American labor. They also reach a very supply-side conclusion, namely that investment in rebuilding skilled manufacturing will be necessary.

I have no idea if these are changes relative to these economists’ earlier work (and would be the last to lay any claim to being able to sit in judgment on them), but I do think it indicates a remarkable change in the conversation happening at the elite level in the field. I’ll revisit this in more detail in a few weeks.

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One Response to A sea change?

  1. Pingback: Not-so-great moments in development economics | aluation

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