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Difficulties in finding middle-skilled jobs under increased automation

Published online by Cambridge University Press:  23 May 2022

Hideki Nakamura
Hideki Nakamura*
Affiliation:
Department of Economics, Osaka Metropolitan University, 3-3-138 Sugimoto, Sumiyoshi, Osaka 558-8585, Japan
*
Email: hideki.nakamura@omu.ac.jp
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Abstract

This study investigates the labor market under increased automation of middle-skilled jobs wherein worker suitability for these jobs is considered. We examine two effects of increased automation on workers. The first effect is the possibility of replacement of middle-skilled workers by machines. The second effect is the diversity in job mismatch probabilities of workers. If machines perform a worker’s suitable jobs more (or less) than the worker’s unsuitable jobs, then the worker’s job mismatch probability rises (or declines). Because workers who have larger job mismatch probabilities remain job seekers, it is more difficult for a firm to find a suitable worker. Due to these two effects, underemployment rises.

Keywords

Worker suitability for tasksincreased automationindividual job mismatch probability (IMP) of a workerdiversity in workers’ IMPs
Type
Articles
Information
Macroeconomic Dynamics , Volume 27 , Issue 5 , July 2023 , pp. 1179 - 1201
Copyright
© The Author(s), 2022. Published by Cambridge University Press

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Footnotes

*

I benefited from discussions with Masakatsu Nakamura. I would like to thank the anonymous referee for valuable and insightful comments, the associate editor, Francesco Zanetti, and the editor, William Barnett, for the encouragement for revisions. This study was funded by the Japan Society for the Promotion of Science (18K01512).

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