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Routinization-Biased Technical Change And Globalization: Understanding Labor Market Polarization

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  • JAEWON JUNG
  • JEAN MERCENIER

Abstract

type="main" xml:id="ecin12108-abs-0001"> There is now ample evidence that jobs and wages have been polarizing at the extremes of the skill distribution since the early 1990s. Possible explanations include, among others, routinization-biased technical change (technical progress substituting more easily for labor in performing routine rather than nonroutine tasks) and globalization (more specifically, offshore outsourcing by multinational firms). In this article, we develop a unified theoretical general equilibrium model and examine the implications of each competing hypotheses for labor market polarization. (JEL J21, J23, J24, F66)

Suggested Citation

  • Jaewon Jung & Jean Mercenier, 2014. "Routinization-Biased Technical Change And Globalization: Understanding Labor Market Polarization," Economic Inquiry, Western Economic Association International, vol. 52(4), pages 1446-1465, October.
    • Handle: RePEc:bla:ecinqu:v:52:y:2014:i:4:p:1446-1465
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    Cited by:

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    2. Wacks, Johannes, 2021. "Labor Market Polarization with Hand-to-Mouth Households," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242391, Verein für Socialpolitik / German Economic Association.
    3. Jocelyn Maillard, 2021. "Automation, Offshoring and Employment Distribution in Western Europe," Working Papers halshs-03219118, HAL.
    4. Guido Matias Cortes, 2016. "Where Have the Middle-Wage Workers Gone? A Study of Polarization Using Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 63-105.
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    7. Lucas van der Velde, 2020. "Within Occupation Wage Dispersion and the Task Content of Jobs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(5), pages 1161-1197, October.
    8. Bachmann, Ronald & Demir, Gökay & Green, Colin P. & Uhlendorff, Arne, 2022. "The Role of Within-Occupation Task Changes in Wage Development," IZA Discussion Papers 15647, Institute of Labor Economics (IZA).
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    10. Eleftheria KOLOKYTHA & Georgios KOLOKYTHAS & Fotini PERDIKI & Stavros VALSAMIDIS, 2018. "Labour Job Digitalization: Myths And Realities," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 17(2), pages 3-18.
    11. Jaccoud, Florencia, 2025. "Robots & AI Exposure and Wage Inequality," MERIT Working Papers 2025-013, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    12. Reeson, Andrew & Mason, Claire & Sanderson, Todd & Bratanova, Alexandra & Hajkowicz, Stefan, 2016. "The VET era: equipping Australia’s workforce for the future digital economy," MPRA Paper 114022, University Library of Munich, Germany.
    13. Böhm, Michael Johannes & Etheridge, Ben & Irastorza-Fadrique, Aitor, 2025. "The Impact of Labour Demand Shocks when Occupational Labour Supplies are Heterogeneous," IZA Discussion Papers 17851, Institute of Labor Economics (IZA).
    14. Jaewon Jung, 2024. "The Labor Market and Growth Implications of Skill Distribution: A Dynamic General Equilibrium Model with Skill Heterogeneity," Mathematics, MDPI, vol. 12(21), pages 1-22, October.
    15. Jaewon Jung, 2015. "Organizational Belief, Managerial Vision, and International Trade," FIW Working Paper series 161, FIW.
    16. Wang, Xiupeng, 2020. "Labor market polarization in Britain and Germany: A cross-national comparison using longitudinal household data," Labour Economics, Elsevier, vol. 65(C).
    17. Aleksandra Skorupinska & Joan Torrent-Sellens, 2017. "ICT, Innovation and Productivity: Evidence Based on Eastern European Manufacturing Companies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(2), pages 768-788, June.
    18. Jaewon Jung, 2017. "Organizational Belief, Managerial Vision, and International Trade," Thema Working Papers 2017-26, THEMA (Théorie Economique, Modélisation et Applications), CY Cergy-Paris University, ESSEC and CNRS.
    19. Cheng, Cheng & Wang, Xiaobing, 2021. "Transportation cost reducing technological change and wages inequalities," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 600-611.
    20. Cavenaile, Laurent, 2021. "Offshoring, computerization, labor market polarization and top income inequality," Journal of Macroeconomics, Elsevier, vol. 69(C).
    21. Manuel A. Hidalgo-Pérez & Benedetto Molinari, 2022. "The effect of early automation on the wage distribution with endogenous occupational choices," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 1055-1082, October.
    22. Marten, Alex L. & Schreiber, Andrew & Wolverton, Ann, 2024. "Occupational Affiliation and the Incidence of Environmental Regulation," National Center for Environmental Economics-NCEE Working Papers 348909, United States Environmental Protection Agency (EPA).
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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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