Worker specialisation & occupational vulnerability
A new Swedish study reveals how worker specialisation determines who survives occupational decline. Researchers analysed 1.7 million male workers to understand why some thrive whilst others struggle when their occupations face technological disruption.
The study introduces an "Occupation Specialisation Index" (OSI) that measures how dependent workers are on their current occupation versus their outside options. Think of it as measuring whether someone is a specialist deeply tied to one field or a generalist with transferable skills across multiple areas.
Key findings highlight the vulnerability gap:
- Low-specialisation "generalists" were highly mobile when routine occupations declined. They successfully transitioned to non-routine work and maintained comparable wage growth to workers who had never been in routine jobs.
- High-specialisation workers largely remained in declining routine occupations despite shrinking opportunities. They experienced significantly lower wage and earnings growth than both generalists and workers in stable occupations.
The research used Swedish administrative data spanning 1997-2013, tracking workers through a period when routine occupations declined by 6 percentage points due to automation and technological change.
The specialisation paradox: Workers with the deepest expertise in their field — those who initially earned wage premiums for their specialisation — became the most vulnerable when demand shifted. Meanwhile, workers with broader, more transferable skills successfully adapted to changing labour market conditions.
This research suggests that adaptability may matter more than deep specialisation in our rapidly changing economy.