Occupational Mobility of Routine Workers

This paper analyzes occupational polarization within and across workers, as well as the occupational mobility of routine workers, using comprehensive data from Finland. As in most industrialized countries, job markets have polarized over the last few decades. Decomposition analysis shows that the upper tail of occupational polarization is largely a with-workers phenomenon, indicating that workers have moved to abstracts tasks. In contrast, the share of low-level service tasks increases largely through entry dynamics. The direction of occupational mobility is nevertheless linked with the task content in origin jobs. Conditional on observed general and specific human capital, routine cognitive workers are more likely to move up in the hierarchy, while routine manual workers are more likely to move to low-skilled service occupations. Data on plant closures and mass lay-offs are also used to identify involuntary separations from routine occupations. These results demonstrate similar strong uneven adjustment pattern, with routine cognitive workers being more able to adjust with smaller employment disruptions and wage costs.