| Summary: | This paper explores the distributional consequences of technological change on midskilled routine workers in Switzerland in three steps: (1) The first part studies aggregate trends in the labor market and confirms the pattern of an eroding middle: The disadvantages of technological progress are concentrated on routine workers whose share in the labor force has drastically declined over time. (2) In order to better understand the economic conditions associated with this overall pattern, the second part draws on individual-level panel data to study actual employment transitions. The analysis shows that transitions are less frequent than the aggregate pattern might suggest: Only a minority of routine workers actually switches to other
jobs while the largest chunk of the decline is explained by ‘natural transitions’ into
retirement. (3) The last part of the paper builds on original survey data to examine routine workers’ subjective assessment of their chances in a changing world of work and demonstrates a surprisingly high degree of consciousness about susceptibility to automation. To conclude, I discuss some societal implications of the ‘hollowing of the middle’.
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