Heterogeneous effects of automation: How are young workers affected by a changing labor market?

We study the effect of automation on labor market outcomes with a focus on young workers and the case of Chile. We develop an index of routine task content of each occupation and follow two approaches. First we study the effect of automation on labor markets at the local level. Then we focus on mobility across occupations. We find that young workers are more easily displaced by automation than older workers of similar characteristics. This effect is concentrated on young workers in the age group 18-22. Young workers in the age group 23- 29 do not suffer unemployment significantly, but instead their employment participation decreases in occupations with high routine task content, reflecting mobility towards more flexible occupations. Wages fall in occupations with high routine task content, indicating that there is a decrease in demand for workers performing these tasks.