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The Polarization of Employment in German Local Labor Markets

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  • Charlotte Senftleben
  • Hanna Wielandt
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    Abstract

    This paper uses the task-based view of technological change to study employment and wage polarization at the level of local labor markets in Germany between 1979 and 2007. In order to directly relate technological change to subsequent employment trends, we exploit variation in the regional task structure which reflects a region’s potential of being affected by computerization. We build a measure of regional routine intensity to test whether there has been a reallocation from routine towards non-routine labor conditional on a region’s initial computerization potential. We find that routine intensive regions have witnessed a differential reallocation towards non-routine employment and an increase in low- and medium-skilled service occupations. Our results corroborate the predictions of the task-based framework and confirm previous evidence on employment polarization in Germany in the sense that employment growth deteriorates at the middle of the skill distribution relative to the lower and the upper tail of the distribution.

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    Bibliographic Info

    Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2012-013.

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    Length: 31 pages
    Date of creation: Feb 2012
    Date of revision:
    Handle: RePEc:hum:wpaper:sfb649dp2012-013

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    Related research

    Keywords: Job Tasks; Polarization; Technological Change; Service Occupations; Regional Labor Markets;

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    References

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    1. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    2. Black, Sandra E. & Spitz-Oener, Alexandra, 2007. "Explaining Women's Success: Technological Change and the Skill Content of Women's Work," ZEW Discussion Papers 07-033, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Amanda Gosling & Stephen Machin & Costas Meghir, 1994. "The changing distribution of male wages in the UK," IFS Working Papers W94/13, Institute for Fiscal Studies.
    4. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
    5. Johannes Gernandt & Friedhelm Pfeiffer, 2007. "Rising Wage Inequality in Germany," SOEPpapers on Multidisciplinary Panel Data Research 14, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Katz, Lawrence F & Murphy, Kevin M, 1992. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 35-78, February.
    7. Bertrand, Marianne & Kramarz, Francis, 2002. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," IZA Discussion Papers 415, Institute for the Study of Labor (IZA).
    8. Antonczyk, Dirk & DeLeire, Thomas & Fitzenberger, Bernd, 2010. "Polarization and Rising Wage Inequality: Comparing the U.S. and Germany," IZA Discussion Papers 4842, Institute for the Study of Labor (IZA).
    9. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
    10. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," ZEW Discussion Papers 10-014, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
    12. Matthias Weiss, 2004. "Skill-Biased Technological Change: Is there Hope for the Unskilled?," MEA discussion paper series 04045, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    13. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
    14. Kohn, Karsten, 2006. "Rising Wage Dispersion, After All ! The German Wage Structure at the Turn of the Century," ZEW Discussion Papers 06-31, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    15. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June.
    16. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
    17. Dauth, Wolfgang, 2010. "Agglomeration and regional employment growth," IAB Discussion Paper 201007, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    18. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. repec:kas:wpaper:2006-81 is not listed on IDEAS
    20. Autor, David & Dorn, David, 2009. "Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States," IZA Discussion Papers 4290, Institute for the Study of Labor (IZA).
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