Working Paper, Department of Economics, Uppsala University 2011:15
This paper investigates the connection between the Swedish wage profile of net job creation and Autor, Levy, and Murnane's (2003) proposed substitutability between routine tasks and technology. We first show that between 1975 and 2005, Sweden exhibited a pattern of job polarization with expansions of the highest and lowest paid jobs compared to middle-wage jobs. We then use cross-sectional and longitudinal analyses of job-specific employment to map out the importance of routine versus nonroutine tasks for these changes. Results are consistent with substitutability between routine tasks and technology as an important explanation for the observed job polarization during the 1990s and 2000s, but not during the 1970s and 1980s. In particular, the overrepresentation of routine tasks in middle-wage jobs can potentially explain 44 percent of the growth of low-wage jobs relative to middle-wage jobs after 1990 but largely lacks explanatory power in earlier years.