That was then, this is now: Skills and routinization in the 2000s

Abstract

We analyze changes in the skill content of occupations in US four-digit manufacturing industries between 1999 and 2010. Following a 'task-based' approach, we elaborate a measure of Non-Routine skill intensity that captures the effects of industry exposure to both technology and international trade. The paper adds to previous literature by focusing on both the determinants of demand for Non-Routine skills and their effects on industry productivity and wages. The key finding is that import competition from low-wage countries has been a strong driver of demand for Non- Routine skills during the 2000s. Both technology and imports from low-wage countries are associated with mild cross-industry convergence in skill intensity while imports from high and medium wage countries are at root of persistent heterogeneity across occupational groups. We also find that higher Non-Routine skill intensity has had at best a modest effect on productivity and wages, except for high-skill occupations.