Changing Task Content of Jobs in India

The world has been experiencing a digital revolution. Since the early 1970s, digital technology has invaded all aspects of human life—from communications to finance to manufacturing to social interaction. The use of digital technology is visible everywhere, and this enormous increase in its use has coincided with an occupational upgrading and a sharp increase in wage disparity. Since the mid-1980s, there has been an increase in wage disparities between skilled and unskilled workers in countries across the globe. Many theoretical and empirical studies conducted during the 1990s argued that the rising wage disparity is due to the adoption of information and communications technology (ICT) (Bound and Johnson 1992; Levy and Murnane 1992; Katz and Murphy 1992). Propounding the hypothesis of skill-biased technological change (Sbtc), these studies argued that digital technology has been skill-biased and, therefore, raised the demand for highly skilled workers, leading to the increase in wage inequality. The Sbtc hypothesis proved empirically very successful and dominated the debate on wage disparity until the late 1990s, when it started receiving huge criticism for treating the relation between technology and skill demand as a black box. It also failed to explain the growing polarisation of labour markets in many countries, which suggests that the demand for both highly skilled and unskilled workers was increasing simultaneously, and which is clearly at odds with the Sbtc hypothesis.

In response to the criticism, some scholars provided more nuanced versions of the Sbtc hypothesis (Autor et al 2003). Instead of dividing labour into skilled and unskilled labour, these models tried to understand the skill requirement of different jobs through a task-based framework. They categorised the tasks performed by labour into routine tasks, which can be codified and, therefore, easily performed by machines, and non-routine tasks, which require human interaction and, hence, cannot be mechanised easily. These two broad groups are imperfect substitutes for each other. Non-routine tasks are subdivided into non-routine cognitive tasks and non-routine manual (NRM) tasks. These models indicate that recent improvements in ICT, and the consequent decline in the price of ICT capital, have reduced labour demand to carry out routine tasks, and increased it for non-routine tasks. Since non-routine task-intensive occupations are concentrated at the top and bottom of the wage pyramid, it has led to a polarisation of the labour market. These models suggest that the recent surge in the use of digital technology has changed the demand for skills by de-routinising jobs.