Seems like it lines up with the Autor/Thompson expertise framework pretty nicely. Less expert tasks (flight booking) were automated, while more expert tasks (coordinating with wealthy clients) weren't, so employment fell and wages rose.
The big question for welfare, which there's probably no good data on, is how successful the displaced agents were at switching professions.
Also, is there a hypothesis for why, as agent clientele “pivoted sharply upward” they experienced outsized employment rate changes relative to the market? My naive assumption would be demand during periods of economic ~shakiness~ would be far more resilient for that upmarket demographic as compared to the mass market that agents were serving prior
The upmarket pivot is real, but I think it hides something important. Wages did recover for those who stayed, but the profession is now more sensitive to recessions than before. The market keeps shrinking until only the most secure jobs are left, and then it points to those survivors as proof that things worked out. Still, I agree with the policy takeaway: it's better to focus on helping people transition than to panic about unemployment. Great write-up, Ernie.
Seems like it lines up with the Autor/Thompson expertise framework pretty nicely. Less expert tasks (flight booking) were automated, while more expert tasks (coordinating with wealthy clients) weren't, so employment fell and wages rose.
The big question for welfare, which there's probably no good data on, is how successful the displaced agents were at switching professions.
Incredibly well put.
How greatly has travel spend expanded in the US since the 90s? What is the counter factual total agent employment in that world?
Also, is there a hypothesis for why, as agent clientele “pivoted sharply upward” they experienced outsized employment rate changes relative to the market? My naive assumption would be demand during periods of economic ~shakiness~ would be far more resilient for that upmarket demographic as compared to the mass market that agents were serving prior
I'm honestly astounded there are that many travel agents still. I would have guessed a far lower percentage of the ~2000 peak employed today.
The upmarket pivot is real, but I think it hides something important. Wages did recover for those who stayed, but the profession is now more sensitive to recessions than before. The market keeps shrinking until only the most secure jobs are left, and then it points to those survivors as proof that things worked out. Still, I agree with the policy takeaway: it's better to focus on helping people transition than to panic about unemployment. Great write-up, Ernie.
Interesting how stable it’s been though lately.