During the financial crisis of 2008, employment fell dramatically, as was expected. But in the economic recovery that followed, only certain jobs bounced back. A research paper by Wharton finance professor Nikolai Roussanov looks at this phenomenon and correlates it with technological adoption by companies during a down economy.
The paper, “Short-Run Pain, Long-Run Gain? Recessions and Technological Transformation,” finds that the jobs that did return were primarily the higher-skill jobs, or higher-skill “cognitive” jobs—meaning jobs that require a fairly high level of education, usually in the tech or creative sector. Lower-skill, “routine” jobs failed to recover as much.
Roussanov recognizes that recessions drive this kind of “job polarization,” and his paper attempts to uncover how. “When we talk about ‘polarization,’ this is exactly what we mean—the distribution of wages becomes more polarized. We have very high-skill workers, and we have very low-skill workers, but this middle is, in some sense, disappearing,” says Roussanov. “Why this is important, and whether this is a good thing or a bad thing, it’s not an easy question to answer.”
Read the full story at Knowledge@Wharton.
