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Routinization-Biased Technical Change, Globalization and Labor Market Polarization: Does Theory Fit the Facts?

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  • Jaewon Jung

    ()
    (RWTH Aachen University and THEMA, U. de Cergy-Pontoise)

  • Jean Mercenier

    ()
    (Department of Economics (University of Verona))

Abstract

There is now ample evidence that jobs and wages have been polarizing at the extremes of the skill distribution since the early 90s. Autor, Levy and Murnane (2003) have suggested that this might be due to technology substituting more easily for labor in performing routine rather than non-routine tasks. Other potential explanations include globalization. Active empirical research has now identified important stylized facts. The aim of this paper is to provide a theoretical exploration of alternative potential causes to this labor market polarization, and to identify which, if any, are consistent with the stylized facts.

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Bibliographic Info

Paper provided by University of Verona, Department of Economics in its series Working Papers with number 13/2010.

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Date of creation: Sep 2010
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Handle: RePEc:ver:wpaper:13/2010

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References

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  1. Weiss, Matthias, 2008. "Skill-biased technological change: Is there hope for the unskilled?," Economics Letters, Elsevier, vol. 100(3), pages 439-441, September.
  2. Giorgio Barba Navaretti & Davide Castellani & Anne-Célia Disdier, 2006. "How Does Investing in Cheap Labour Countries Affect Performance at Home? France and Italy," Development Working Papers 215, Centro Studi Luca d\'Agliano, University of Milano.
  3. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
  4. Alan Manning, 2004. "We Can Work It Out: the Impact of Technological Change on the Demand for Low Skill Workers," CEP Discussion Papers dp0640, Centre for Economic Performance, LSE.
  5. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
  6. David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
  7. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
  8. Pär Hansson, 2005. "Skill Upgrading and Production Transfer within Swedish Multinationals," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(4), pages 673-692, December.
  9. Jung J. & Mercenier J., 2008. "A Simple Model of Offshore Outsourcing,Technology Upgrading and Welfare," Working Papers ERMES 0808, ERMES, University Paris 2.
  10. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
  11. 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.
  12. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
  13. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, vol. 65(1), pages 1-20, January.
  14. Emily Blanchard & Gerald Willmann, 2013. "Trade, Education, and The Shrinking Middle Class," Kiel Working Papers 1831, Kiel Institute for the World Economy.
  15. Alan Manning, 2004. "We Can Work It Out: The Impact of Technological Change on the Demand for Low-Skill Workers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 581-608, November.
  16. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact Of Outsourcing And High-Technology Capital On Wages: Estimates For The United States, 1979-1990," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 907-940, August.
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Cited by:
  1. Das, Satya P., 2011. "International trade and polarization in the labor market," Economics Discussion Papers 2011-48, Kiel Institute for the World Economy.
  2. Guido Matias Cortes, 2012. "Where Have the Routine Workers Gone? A Study of Polarization Using Panel Data," The School of Economics Discussion Paper Series 1224, Economics, The University of Manchester.
  3. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC-IPTS Working Papers on Digital Economy 2013-07, Institute of Prospective Technological Studies, Joint Research Centre.

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