The Second Computerization Wave; Validating Predictions for the Labor Market

In the long-running automation process, a new wave is about to break lose. The second computerization wave is again predicted to take over a lot of jobs. In this thesis that assumption is tested in US and UK labor markets. In an influential paper Frey and Osborne predicted 47% of US employment to be in danger of automation. In the same paper they came up with a probability of computerization for 702 individual occupations. This research paper tries to verify if there already are developments present in today’s labor markets that relate to the probability of computerization. Evidence is found that relates to a negative correlation between the probability of computerization and recent changes in employment. However more striking is the strong evidence, which is found, that the probability positively correlates to wage. Moreover, contrary to general believe, this appears to be even more true for low-skilled occupations. At the same time high-skilled occupations seem to be more at risk.