Automation and segmentation: Downgrading employment quality among the former “insiders” of Western European labour markets

Abstract

The literature on labour market segmentation traditionally looks at servitisation as the main structural driver behind the rise of employment precariousness, overlooking another crucial engine of the knowledge-economy transition: the Information and Communication Technologies (ICT) revolution. This paper proposes a task-based approach to complement the skill-biased framework usually applied to labour market segmentation, investigating the correlation between occupational exposure to the risk of automation and low-quality employment. The empirical analysis, based on 14 countries sampled from ESS (2002–2018), shows a strong correlation between technological replaceability and low income across all of Western Europe, especially after the Great Recession, while its association with atypical employment is mainly driven by fixed-term contracts in Central and Southern Europe and by part-time arrangements in Anglo-Saxon and Scandinavian countries. Overall, a “recalibrated” dualisation emerges in Western European labour markets, characterised by the diffusion of low labour earnings and atypical contracts among mid-skill routine workers, besides the low-skill service precariat.