UNU-MERIT Working Papers

Working Paper #2022-014

Routine-biased technological change and employee outcomes after mass layoffs: Evidence from Brazil

Antonio Soares Martins Neto, Xavier Cirera & Alex Coad #2022-014 PDF

We investigate the impact of "routinization" on the labor outcomes of
displaced workers. We use a rich Brazilian panel dataset and an
occupation-task mapping to examine the effect of job displacement in
different groups, classified according to their tasks. Our main result
is that following a layoff, workers previously employed in
routine-intensive occupations suffer a more significant decline in wages
and more extended periods of unemployment. As expected, job displacement
has a negative and lasting impact on wages. Still, workers in
routine-intensive occupations are more impacted than those in
non-routine occupations in terms of wages (an increase of one point in
the routineintensity index results in a further decline of 2 percent in
workers' relative wages) and employment. Furthermore, our results
indicate that workers in routine-intensive occupations are more likely
to change occupations after the shock, and those who do not switch
occupational fields suffer a more significant decline in wages. Lastly,
even though the loss of employer-specific wage premiums explains 13
percent of displaced workers' drop in wages, it does not explain
routine-intensive workers' more substantial losses.

Keywords
  • Routine intensity
  • Job displacement
  • Mass layoffs
  • Occupational mobility
  • Brazil
JEL codes
  • J24
  • J63
  • O54

Cite this as

APA 7th ed.

Soares Martins Neto, A., Cirera, X., & Coad, A. (2022). Routine-biased technological change and employee outcomes after mass layoffs: Evidence from Brazil (UNU-MERIT Working Paper No. 2022-014). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=9278

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