Job computerization, occupational employment and wages: A comparative study of the United States, Germany, and Japan

Abstract

This study adds to the growing literature on wage and employment responses to the risk of job computerization. Specifically, it revisits the original occupational perspective and inquires into the nature of the adjustments of occupational wages and employment, i.e., the potential benefits and costs associated with professional careers in such occupations. The investigation further aims at identifying whether these adjustment processes are universal — as suggested by the global availability of the respective technology — or reflect country-specific peculiarities. To this end, it conducts a comparative analysis with data from the United States, Germany, and Japan, three G7 lead countries which share the commitment to fostering technological progress, but which are also characterized by distinctly different labor market institutions and approaches to industrial policies. Generally consistent with the country-specific employment institutions and common corporate strategies, transmission channels — as reflected by the relationship between adjustments of occupational employment and wages — differ between countries. In all three countries, though, higher risks of computerization are associated with relative wage losses in occupations which require low levels of formal education or training.