Routine-biased technological changeand wages by education level:Occupational downgrading anddisplacement effects

https://thema.u-cergy.fr/recherche/documents-de-travail/Taking advantage of geographic (and time) variation in the proportion of routineoccupations in the US, we study the impact of this variation on the wage rate ofworkers by educational group. Using individual data and a Bartik-type IV strategy,we show that not only non-college-educated workers but also, in the same proportion,workers with fewer than four years of college are negatively impacted by this routinebiased technological change. The latter skill group currently represents 30% of the USpopulation. We show that only 10% to 20% of the impact on both educational groupsis related to occupational and industrial downgrading (the composition eect) and thatmost of the wage impact occurs within industries and occupations, including manualservice occupations. This is consistent with the displacement eect described in thetheoretical literature on task-biased technological change and automation