Routine job dynamics in the Swiss labor market

Abstract

I investigate the role of labor market flows in the decline of routine employment in Switzerland between 1992 and 2018 using rich individual-level panel data from the Swiss Labour Force Survey. Existing research on the labor market effects of digital transformation has identified jobs with a high content of routine tasks as particularly prone to automation. My analysis shows that the decline in routine employment was almost entirely driven by decreasing inflow rates from non-participation and non-routine occupations as opposed to increasing outflow rates from routine jobs. Performing Oaxaca-Blinder-type nonparametric decompositions, I find that these inflow rate decreases can primarily be accounted for by changed propensities to transition into routine occupations, whereas demographic changes play a minor role. The propensity to transition from non-routine into routine employment has decreased for all distinguished demographic groups, while the propensity to enter the labor market into routine cognitive employment has particularly decreased for middle-aged individuals and those with low or medium education. My findings suggest that the Swiss labor market is evolving differently than the US labor market in the wake of the digital transformation.