How much lower are the career earnings of workers who face large declines in demand for their occupations, compared to similar workers who do not? To answer this question we combine forecasts on occupational employment changes, measures of realized occupational decline and technological replacement, and administrative panel data on the population of Swedish workers, with a highly disaggregated initial occupational classification. We find that compared to similar workers, those facing occupational decline lost about 2-5 percent of mean cumulative earnings from 1986-2013, with workers at the bottom of their occupation’s initial earnings distribution suffering substantially larger losses. These earnings losses are partly accounted for by reduced employment and increased time spent in unemployment and retraining.
Contact Person: Michael E. Rose