The effects of technology diffusion and narratives on firms and workers

• Applicant: Professor Dr. Ronald Bachmann
• Subject Area: Statistics and Econometrics
• Term: since 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 442490944

The overarching aim of the proposed project is to quantify the direct and indirect effects of technological progress on labour-market outcomes and educational and occupational decisions. We measure direct effects via labor demand and task requirements of firms, and indirect effects via media reports. The main objectives are to (1), provide a detailed description of the diffusion of digital technologies in Germany, (2) explore how the exposure to digital technologies affects firms and workers (3) describe the narrative about digital technologies in German media reports, and how they are related to actual labour-market developments, (4) analyse how these media reports affect individual-level behaviour. To achieve Objective 1, we first construct digital intensity (DI) measures that identify industries, occupations, and regions most exposed to digital technologies. We do so using text analysis methods applied to online job vacancies from 2016 onward by measuring how often firms refer to digital technologies in their job postings. Second, we classify specific job task requirements into task groups to study how firms adjust their work processes in response to the adoption of digital technologies. We thus explore which technologies automate, by replacing repetitive tasks, and which technologies augment jobs, by raising demand for new tasks. To achieve Objective 2, we merge our DI measure from objective 1 to administrative linked employer-employee data. First, we study changes in firms’ employment and wages in response to enhanced exposure to digital technologies. Then, we explore which digital technologies already have discernible labour market effects at the industry-, occupation- and national level. Second, we study job stability and wage implications for workers employed in firms with high exposure to digital technologies. Thid, we explore to what extent digital technologies affect wage differences between workers at different firms and workers within the same firm. Looking at the indirect effects of technological change, under Objective 3 we quantify the number of reports on technology, and conduct a sentiment analysis to capture whether these reports are rather neutral or whether they stress benefits or risks of new technology. This analysis generates a technology news index and a technology sentiment index which vary at the regional level and over time. Objective 4 is to shed more light on how individuals react when exposed to reports about technology and its consequences on planned and realized human capital and labour-market decisions. To do so, we use the index constructed under objective 3 and analyse the impact of reports about technology on the choice of the field of professional training/university degree, and the initial occupation choice of young workers.

• DFG Programme: Priority Programmes
• Subproject of: SPP 2267: The digitalisation of working worlds. Conceptualising and capturing a systemic transformation
• International Connection: Canada, Norway
• Cooperation Partners: Professor Colin Green; Professor Fabian Lange, Ph.D.