Technological change, family background and career choice

Although technological advances improve productivity and standards of living, not all workers gain equally. New technologies are likely to have distributional consequences by creating winners and losers in the labour market. Our aim in this project is to study how recent technological changes – such as automation or artificial intelligence – and globalised trade have affected the labour market success of individuals and, furthermore, how they affect the career choices of labour market entrants.

A well-documented empirical regularity is a persistence between parents’ and children’s earnings, which may partly reflect children following the same career paths as their parents. Technological advances may break this link, either through disappearing jobs for current workers, i.e. closing career paths to children, or by creating new career paths which were not open to parents. The policy implications of these labour market changes depend on whether individuals select into occupations and careers based on comparative advantage, possibly inherited, or if occupations ‘run in the family’ due to other factors such as family environment and information limitations. Depending on the underlying explanation for these empirical regularities, the side effects of technological progress might therefore be misallocation of economic talent, temporarily or permanently, or reallocation of individuals into careers for which they are better suited.

Using data from conscription tests in the IFAU database, we will first construct ability profiles for all individuals. From these ability profiles we can construct representative profiles for all occupations by analysing the skill profiles of tenured workers in a given occupation. With these profiles at hand, we will study the presence and heterogeneity in occupational following in the Swedish labour market as well as career choice more broadly, and then investigate whether this phenomenon is likely to reflect shared skills or intergenerational career persistence for other reasons.

Then, using both existing and new Swedish and international data on occupations and tasks exposed to technological change, we aim at studying career choice and labour market consequences of children whose parents’ occupation is at risk of decline. We will use data on labour market and economic outcomes from the IFAU database for children, siblings and parents and study the consequences of being stuck in a declining profession or following a career path different from that of one’s parents. A key aspect of our analysis is to try to understand how skills influence career choice and heterogeneous labour market consequences of technological change.