European Labor Market and Occupational Shifts

Over the past two decades, Europe has undergone a profound transformation driven by automation. The growing use of machines, robots, and digital systems has allowed outsourcing tasks once carried out by people. This technological shift has redefined how goods and services are produced, has improved efficiency of work, but also has posed a crucial challenge for employees, whose skills have become less relevant. This study examines the way that technology-induced occupational shifts shape the European labor market and workers’ remunerations. We are interested in a way that individual decision makers react and respond to changes on the labor market, as well as we want to quantify the economic consequences of such shocks. Within our model, we simulate a stylized scenario of increasing the demand for skills used in professional occupations – those types of jobs that include most complex and non-routine tasks and require high levels of education from employees.