Effect of Occupation Human Capital Requirements on Employment and Compensation

This study examines the effects of the relative importance of task type on occupational employment and wages between 2000 and 2018. Occupations consist of an array of tasks. Tasks can be categorized on a two-axis basis as routine or non-routine and cognitive or manual based on human capital elements required to undertake a given task. It was hypothesized automation of routine tasks would lead to negative effects on both employment and wages of occupations consisting of primarily routine task arrays. Occupations consisting of predominantly non-routine cognitive and manual tasks were hypothesized to experience positive employment effects. Non-routine cognitive task dominant occupations were hypothesized to experience positive wage effects, while non-routine manual task dominant occupations were hypothesized to have negative employment effects owing to a shortage and surplus of labor, respectively. Testing showed a more significant difference in both employment and wage effects between cognitive and manual tasks. Cognitive task dominant occupations showed consistently greater employment and wage effects while occupations consisting of task arrays limited by physical capacities showed negative effects to both employment levels and compensation