The Implications of Routine‐Biased Technological Change on Hours Worked Fluctuations*

Abstract Technological change has been biased towards replacing routine labour over the past four decades. We study the implications of those shifts in the task composition of labour demand on hours worked fluctuations. We build quarterly time series on hours worked and task premiums from the CPS and assess the effects of routine‐biased technological change by estimating a VAR model with long‐run exclusion and sign restrictions. The results indicate that the decline in total hours worked is driven by routine‐biased technology shocks through a decline in routine hours. These shocks generate recognizable aggregate fluctuations pointing out to their potential relevance for business cycles.