The Dynamics of Disappearing Routine Jobs: A Flows Approach

Two line graphs illustrate the evolution of employment in routine cognitive and routine manual occupations from 1975 to 2018 based on the law of motion. Routine employment based on law of motion using monthly rates and phase averages

Abstract

We use matched individual-level CPS data to study the decline in middle-wage routine occupations during the last 40 years, and determine how the associated labor market flows have evolved. The decline in employment in these occupations can be primarily accounted for by changes in transition rates from non-participation and unemployment to routine employment. We study how these transition rates have changed since the mid-1970s, and find that changes are primarily due to the propensity of individuals to make such transitions, whereas relatively little is due to demographic changes. We also find that changes in the propensity to transition into routine occupations account for a substantial proportion of the rise in non-participation observed in the U.S. in recent decades.

Publication
Cortes, Guido Matias, Nir Jaimovich, Christopher J. Nekarda, and Henry E. Siu (2020). “The Dynamics of Disappearing Routine Jobs: A Flows Approach,” Labour Economics, vol. 65, August 2020, pp. 1018–23.

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