Anatomy of the Italian occupational structure

Anatomy of the Italian occupational structure:

organization, knowledge and power beyond RBTC

Armanda Cetrulo, Phd student at Scuola Superiore Sant’Anna

Dario Guarascio, National Istitute for Public Policies Analysis

Maria Enrica Virgillito, Assistant Professor at University of Milano La Cattolica

International conference INAPP, 29-30 November 2018

The socio-economic impact of technological change

Project under the research agreement between INAPP and Scuola Superiore Sant’Anna

This work intends to present an anatomy of the Italian occupational structure addressing the question of which factors determine wages.

This will be done accounting for differences across occupational groups and trying to disentagle the role played by technological change, exploiting the rich and highly detailed amount of data of ICP, both in terms of quantitative and qualitative information.

Aim of the (on-going) work

• The debate goes back to Smith, Ricardo and Marx.

• Schumpeter claims that : “The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers goods, the new methods of production or transportations, the new markets, the new form of industrial organization that capitalist enterprise creates” (Schumpeter, The theory of economic development (1961, p.82-83)

• Neoclassical approach initially looks at technological change as an “exogenous factor” (Solow,1956), gradually revised by the endogenous growth theory.

• Evolutionary scholars offer a different analysis of technological change, seen as a complex phenomenon intrinsically embedded in economic dynamics, shaped by institutions, capabilities and interactions among agents (Nelson and Winter,1982; Dosi ,1988).

TECHNOLOGICAL CHANGE AND LABORTHEORETICAL BACKGROUND (1)

THEORETICAL BACKGROUND (2) TECHNOLOGICAL CHANGE, LABOR AND WAGE

• According to mainstream perspective, wages are determined in equilibrium, given by the marginal contribution of individual productivity to the production.

• Relaxing some of the neoclassical assumptions (i.e. perfect competition of the labor market, identical workers), a still exogenous technology can produce different outcomes, favouring the more skilled (SBTC) or the workers employed in jobs with a low degree of routinariety (RBTC). This process will be reflected in employment and wage dynamics.

• From an evolutionary perspective, wages are not simply the result of individual productivity. They depend on the degree of knowledge workers have, their position inside the organization, the control they exert vs others. From a heterodox viewpoint wages reflect power relations among classes and strenght of institutions.

CURRENT DEBATE on JOB POLARIZATION

Employment shares grow among high skill-high wage jobs and low skills-low wage jobs (SBTC).

Jobs with repetitive tasks are being substituted by technology, whereas jobs with abstract (i.e. creativity) or non routine manual tasks (i.e. with high physical dexterity) are less likely to be displaced by new technology (RBTC).

While high wage jobs and low wage jobs are increasing, the number of middle wage jobs decreases.

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Employment growth over RTI quintiles

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ploy

men

t gro

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Employment dynamics over the period 2011-2016 seem partly consistent with RBTC (see Guarascio et al. 2018)

What about Italy?

𝑅𝑇𝐼j,t = 𝑅𝐶j,t + 𝑅𝑀j,t − (𝑁𝑅𝐶𝐴j,t + 𝑁𝑅𝐶𝐼j,t + 𝑁𝑅𝑀j,t + 𝑁𝑅𝑀𝐼𝐴j,t )

from Autor and Dorn (2013)

Wages show a stagnating growth over the period 2011-2016, that stems both from the impact of the crisis and the structural problems of the italian economy (i.e slowdown of labour productivity).

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A less clear relation with the RTI index emerges: wages “increase” more in the first quintile, but also in the second and the fifth one.

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22.2806

0 20 40 60 80RTI index

8-Elementary occupation

7-Plant & machine operators

6-Crafts, agric. & specialised workers

5-Service & sale workers

4-Clerical support workers

3-Technicians professionals

2-Intellectual & scientific workers

1-Legislators,managers,entrepreneurs

RTI across occupational groups-1

00

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Employment growth rate 2011-2016

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Wage growth rate 2011-2016

• Significant differences in terms of RTI emerge across professions.

• Employment increases the most in the elementary occupations that display the second highest RTI index, in service occupations and in low RTI index jobs such as intellectual workers and technicians.

• Wages “increase” only in the first group and very slightly for crafts, plant and machine operators and elementary occupations.

OCCUPATIONAL GROUPS

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020

4060

8010

0R

TI

0 1000 2000 3000 4000 5000Median wage

RTI and wages

xTechnicians and associate professionals

Clerical support workers

Legislators, Managers, Entrepreneurs

Intellectual and scientific workers

Craft workers, agriculture and specialised workers

Plant and machine operators

Elementary occupations

Service and sales workers++

RTI INDEX AND WAGES BY OCCUPATIONAL GROUPS

Which are the important factors we should take into account in order to study the impact of

technological change (and the key mediating role of skills, knoweledge and organisational elements) on

work and wages distribution?

- very preliminary stage -

Our research question

What do we mean for work?Thank to ICP (Indagine campionaria delle professioni) of ISTAT-INAPP, we can use a very comprehensive database, that map Italian professions from 1 digit to 5 digits level of disaggregation over two time periods (2005-2010 and 2011-2016). Indeed, we have very detailed data on 800 occupations sampled by 16000 workers thorugh a complex sampling strategy . For each occupation at 5 digit, that is very likely to correspond to a real job, we can look at:

•the specific productive process and sequence of tasks in which the worker is employed (thanks to ATLANTE);

•the prevalent economic sector for each occupation; •the composition of the workforce in terms of education, gender, geographical origin and job

contracts; •wage and employment dynamics; •a very comprehensive qualitative analysis.

We can move across different levels of analysis (from aggregate to highly disaggregate) and different objects of analysis (from production processes to social interactions).

Example: The highest and lowest wage jobs

4 Digit Occupation Main activities Mediam wage

Women (%)

Tert . education

(%)

Indet. Contracts

(%)RTI

5442 Children surveillance personnel and similar occupations

supervise and inform parents about children's behavior, organize play activities, take care of children's hygiene

598.67 Euro .94 .13 .61 21.34

1111Members of government bodies and national assemblies with legislative and regulatory power

participate to conferences, and congresses, appoint administrators of institutions, institutions, public companies, plan and make new law proposals

3.764.833 Euro .34 .80 .33 22.5

We look at the concept of innovation as directly reported by the workers, thanks to a specific question present in ICP and a vast amount of micro information.

“Have external factors occurred in the last three years that have changed the way in which you work?”

Which kind of innovation has taken place? 1. Change in the used technologies 2. Change in the legislation 3. New goods or services made 4. Change in the work organisation 5. Change in the materials used

TECHNOLOGICAL CHANGE SEEN AS INNOVATION

Significant heterogeneity among occupation groups for all types of innovation, relevant dispersion within some groups.

INNOVATION ACROSS OCCUPATION GROUPS0

.2.4

.6.8

Inte

nsity

1 2 3 4 5 6 7 8

excludes outside values

INNOVATION

Innovation in Laws Technological InnovationOrganisational Innovation Materials InnovationProduct Innovation

1 Legislators, Managers, Entrepreneurs

2 Intellectual and scientific workers

3 Technicians and associate professionals

4 Clerical support workers

5 Service and sales workers

6 Craft workers, agriculture and specialised workers

7 Plant and machine operators

8 Elementary occupations

More specifically, we focus on technological innovation and organisational innovation

0 .2 .4 .6 .8







2-Intellectual & scientif workers


Innovation

Technological Innovation Organisational Innovation

How can we account for determinants of wage differences across occupational groups?

• DIGITAL SKILLS, • WORK ORGANISATION, • KNOWLEDGE AND LEARNING,

• EDUCATION, • GENDER, • ECONOMIC FACTORS, • INSTITUTIONAL FACTORS, • INTERNATIONAL MARKETS - GVC.

DIGITAL SKILLS*

KNOWLEDGE OF INFORMATICS AND

ELECTRONICS - from normal user to expert

USE OF PERSONAL COMPUTER AND

SOFTWARES - from normal user to expert

USE OF MAIL ADDRESS required by the job

Correlation matrix *significance at 1%Median wage Tech Innovation Org Innovation ICTknow ICTknowC PCuse PCuseC Mailuse

Median wage 1.0000

Tech Innovation 0.1480* 1.0000

Org Innovation 0.3605* 0.3283* 1.0000

ICTknow 0.3210* 0.4280* 0.2802* 1.0000

ICTknowC 0.3496* 0.4354* 0.2892* 0.9791* 1.0000

PCuse 0.4465* 0.4380* 0.4518* 0.8004* 0.8085* 1.0000

PCuseC 0.4847* 0.4242* 0.4369* 0.7975* 0.8301* 0.9686* 1.0000

Mailuse 0.4867* 0.3418* 0.4916* 0.6332* 0.6653* 0.8523* 0.8498* 1.0000

*Consistent with Eurostat definition of “e-skills”, see DESI

All digital skills correlate positively with technological, organisational innovation and wages. In particular, the use of personal computer (especially if for complex tasks) shows the highest correlation values in line with RBTC theory.

Digital skills are differently distributed across occupational groups. However, the average level of ICT knowledge and ICT complex knowledge required is very low, even in the more specialised occupations (2 and 3).

0 20 40 60 80 100Intensity









DIGITAL SKILLS

Pc use (complexity)

Pc use

ICT knowledge (complexity)

ICT knowledge

Mail use

DIGITAL SKILLS OVER OCCUPATIONAL GROUPS

WORK ORGANISATION* * Ó Riain and Healy (2018), Holm et al. (2010); Lorenz and Valeyre (2005)

AUTONOMY

CONTROL ⎨OF THE

WORKERS

OF THE PROCESSES

SOCIAL ORGANISATION STRUCTURE

TYPE OF WORK

WORK ORGANISATION

CONTROL ⎨OF THE

WORKERS

OF THE PROCESSES

Control, and more specifically control of the workers, can be seen as a dimension of power, following the definition of Dosi and Marengo (2015, p.4) according to which power: 1. “is the ability of ruler to determine the set of actions available to the other agents (the “ruled”)”;

2. “involves the possibility of the authority to veto the decisions or intentions of the ruled ones.”

3. “relates to the ability of the authority to influence or command the choice within the “allowed” choice set (i.e. the span of control of the “ruled”), according to the deliberations of the ruler himself”

Median wage

Tech innovation

Org innovation

Leadership

Guiding others

Guiding others

(complexity)Monitoring

other workers

Monitoring other workers (complexity)

Responsability on others

health


output

Median wage 1.0000

Tech innovation 0.1480* 1.0000

Org innovation 0.3605* 0.3283* 1.0000

Leadership 0.6133* 0.2019* 0.4764* 1.0000

Guiding and motivating

others0.6528* 0.2048* 0.4557* 0.8676* 1.0000

Guiding others(compl

exity)0.6807* 0.2074* 0.4656* 0.8641* 0.9778* 1.0000

Monitoring other workers 0.5536* 0.2348* 0.4411* 0.8195* 0.8370* 0.8169* 1.0000

Monitoring other

workers(complexity)

0.5998* 0.2390* 0.4568* 0.8382* 0.8315* 0.8534* 0.9326* 1.0000


health0.3040* 0.0796* 0.0701* 0.4122* 0.5468* 0.4973* 0.4128* 0.3501* 1.0000


output0.4986* 0.2084* 0.2764* 0.6501* 0.8136* 0.7887* 0.6571* 0.6303* 0.7528* 1.0000

Being leader, monitoring other workers and being responsible of other workers output, are all positively correlated with innovation and the median wage in the profession. No variable shows a negative correlation.

WORK ORGANISATION Control of other workers

Leadership

Guiding and motivating workers

Monitoring others

Responsability on workers health

Responsability on workers output

CONTROL OF WORKERS ACROSS OCCUPATION GROUPS

0 20 40 60 80Intensity









CONTROL OF WORKERS

Strongly different degrees of control over workers can be observed across the groups, with the highest values of managers (leadership around 90/100) and the lowest values observed in the elementary occupation group.

median wage tech innovation Org innovationControlling

process and materials

Controlling process and

materials(complexity)

Operational analysis

Operational analysis(compelxi

ty)Repetitiveness Degree of

automatisation

median wage 1.0000

Tech innovation 0.1480* 1.0000

Org innovation 0.3605* 0.3283* 1.0000


materials0.1996* 0.1104* 0.0897* 1.0000


materials(complexity)

0.2734* 0.1263* 0.1564* 0.9362* 1.0000

Operational analysis 0.4499* 0.2351* 0.3416* 0.5867* 0.6575* 1.0000

Operational analysis(compelxi

ty)0.5086* 0.2480* 0.3591* 0.5124* 0.6366* 0.9547* 1.0000

Repetitiveness -0.5110* -0.1744* -0.4584* -0.0747* -0.1640* -0.4677* -0.5243* 1.0000

Degree of automatisation -0.1718* 0.1584* -0.1489* 0.1454* 0.0803* -0.1625* -0.1799* 0.4661* 1.0000

WORK ORGANISATION Control of the process

Occupations requiring operational analysis and control of processes show positive correlation with innovation and median wage. Occupations characterised by frequent repetitive movements and automatic processes are negatively correlated with innovation and wages .

CONTROL OF THE PROCESS ACROSS OCCUPATION GROUPS

Controlling processes, materials or external environments

Repetitive movementsAutomated process

Operational analysis

0 20 40 60Intensity









CONTROL OF THE PROCESS

Doing repetitive movements and working in automated processes is more frequent for plant and machine operators and very less likely for intellectual and scientific workers.

KNOWLEDGE AND LEARNING* *On the role of knowledge and learning see Dosi (1988), Lundvall (1992), Freeman and Soete (1997)

CRITICAL THINKING

UPDATING AND TRAINING LEARNING

LANGUAGE SKILLS

Correlation matrix (*significant at 1%)median wage tech

innovation org innovation Critical thinking

Innovative ideas Originality Updating

requiredActive

learning

Entry training

with colleagues

median wage

1.0000

tech innovation

0.1480* 1.0000

org innovation

0.3605* 0.3283* 1.0000

Critical thinking

0.5536* 0.2350* 0.4633* 1.0000

Innovative ideas

0.4065* 0.1762* 0.3688* 0.7093* 1.0000

Originality

0.3326* 0.1051* 0.2975* 0.6618* 0.8829* 1.0000

Updating required

0.4082* 0.3182* 0.4205* 0.7001* 0.5983* 0.5096* 1.0000

Active learning

0.5545* 0.2801* 0.4887* 0.9225* 0.7010* 0.6378* 0.6996* 1.0000

Entry training with colleagues

-0.0231 0.1845* 0.0047 -0.0615* -0.3750* -0.3816* -0.2100* -0.0709* 1.0000

All variables show a positive correlation with wages and innovation, except for entry training with colleagues.

Critical Thinking

Innovative ideas Originality

Active learning

Updating

Training with colleagues

KNOWLEDGE AND LEARNING ACROSS OCCUPATION GROUPS

0 20 40 60 80 100Intensity







2-Intellectual & scientif workers


KNOWLEDGE AND LEARNING

Being original and having innovative ideas is not very high, even in intellectual professions (max 60/100) . Training with colleagues is more intense for operators and clerks, whereas a continuous updating is required for legislators, managers and intellectuals.

SOME VERY PRELIMINARY CONSIDERATIONS

1. Knowledge, digital skills and work organisation show strong heterogeneity across occupational groups. These factors may all play a role in the relation between innovation and wages.

2. In the future, we will perform a two steps analysis with an aggregate study of the main groups (PCA-FA) and a case study on some specific occupations within each group to map the occupational structure in Italy.

Log (median wage)i,t = β0 + β1 RTIj + β3Zj,t + β4DSj + β6 Cj+ β6K&Lj + εj,t

REGRESSION MODEL

a very preliminary econometric exploration of the relative role of routinarity, work organisation and knowledge on wage differentials across occupations.

OLS regressions on median wages(1) (2) (3) (4) (5) (6)

RTI -0.00867*** -0.00282*** -0.00342*** -0.00200*** 0.00206*** 0.00245***(-28.54) (-8.33) (-10.68) (-5.12) (5.04) (5.92)

Tertiary Education (%) 0.534*** 0.511*** 0.446*** 0.425*** 0.444***(25.12) (24.99) (20.08) (19.97) (20.19)

Women (%) -0.428*** -0.440*** -0.430*** -0.328*** -0.347***(-24.31) (-24.69) (-24.73) (-18.22) (-18.60)

Young Workers (%) -0.674*** -0.626*** -0.633*** -0.549*** -0.555***(-17.14) (-15.38) (-15.63) (-14.19) (-14.60)

Indeterminate Contracts (%) 0.138*** 0.108*** 0.0805*** 0.0894***(6.61) (4.86) (3.85) (4.26)

Southern workers (%) -0.197*** -0.151*** -0.117*** -0.125***(-5.76) (-4.27) (-3.50) (-3.74)

DS - Use of PC (Intensity) 0.00211*** 0.00180*** 0.00200***(10.27) (9.41) (10.42)

K&L - Innovative ideas (Intensity) 0.000728* 0.0000960 0.00119**(1.99) (0.28) (2.90)

C- Guiding and Motivating (Intensity) 0.00683*** 0.00753***(18.06) (18.41)

C- Controlling processes (Intensity) -0.00237***(-4.64)

_cons 7.626*** 7.518*** 7.506*** 7.333*** 6.925*** 6.921***(458.59) (323.04) (236.54) (154.93) (145.21) (144.96)

N 2996 2996 2996 2996 2996 2996

t statistics in parentheses* p<0.05, ** p<0.01, *** p<0.001



2. We will perform a two steps analysis with an aggregate study of the main groups (PCA-FA) and a case study on some specific occupations within each group to map the occupational structure in Italy.

3. Not new: Knowledge and digital skills always correlate positively with innovation and wages.

4. ?: The role of RTI is partly downsized. 5. New: The higher is the control over other workers, the higher seems

to be the correlation with wages and organisational innovation.



2. We will perform a two steps analysis with an aggregate study of the main groups (PCA-FA) and a case study on some specific occupations within each group to map the occupational structure in Italy.

3. Knowledge and digital skills always correlate positively with innovation and wages. 4. ?: The role of RTI is partly downsized. 5. New: The higher is the control over other workers, the higher seems to be the

correlation with wages (and organisational innovation).

6. The role of organisation cannot be neglected. In particular studying the role of control (see Braveman, 1974) is fundamental to investigate the direction and the content of technological and organisational change within jobs, and ultimately, the distribution of wages across occupations.

Harry Braverman (1998, p. 12, 1st ed. 1974)

“The problem can be fruitfully attacked, it seems to me, only by way of concrete and historically specific analysis of technology and machinery on the one side and social relations on the other, and of the manner in which these two come together in existing

societies. Such an analysis could well start with the possibility that the present mode of the

organization and control of labor arose in capitalist society for reasons specific to that society…"

Additional material

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.010008

.006088

.0068

.00867

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05.0

1.0

15w

age

grow

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log

1 2 3 4 5

2011-2016Wage growth over wage quintiles

.031504

-.002675

.010036.008745

.007818

.001603

.00725.005941

.014899

.0024410

.01

.02

.03

wag

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in lo

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1 2 3 4 5 6 7 8 9 10

2011-2016Wage growth wage deciles

12.555

-3.80114

-2.37612

3.98764

13.7856

-50

510

15po

pula

tion

grow

th

1 2 3 4 5

2011-2016Population growth over wage quintiles

8.3189

17.742

-3.92184

1.56989

3.60891

-18.1145

-3.5264

18.352719.4171

8.1542

-20

-10

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20po

pula

tion

grow

th

1 2 3 4 5 6 7 8 9 10

2011-2016Population growth over wage deciles

Anatomy of the Italian occupational structure

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Transcript of Anatomy of the Italian occupational structure