Up and down the job ladder

The authors of this paper (Beaudry et al) suggest that the demand for skill has been falling since around 2000, reversing the trend of several preceding decades, and as a consequence skilled workers are shifting down the occupational ladder and displacing lower-skilled workers. They claim their model "offers a novel interpretation of the current employment situation in the US." Perhaps so, but the model of skill upgrading and downgrading itself is hardly novel, having been articulated quite nicely by Melvin Reder in a classic 1955 article. Reder's principal interest, as I recall, was in how cyclical changes in aggregate labor demand could have repercussions for wage inequality. This approach to thinking about labor markets as clusters of job tasks to which worker skills are matched, imperfectly, is now sometimes known as the assignment model. I'm sorry to report that Reder's contribution is cited neither by Beaudry et al, nor by Acemoglu and Autor in their chapter on the assignment model in the new Handbook of Labor Economics.

Mel was an occasional informal mentor to me in grad school, and always an interesting guy. I'm sorry not to have kept up with him.