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Job polarization in aging economies

Author

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  • Moreno-Galbis, Eva
  • Sopraseuth, Thepthida

Abstract

The progressive diffusion of ICT explains the raise in the number of highly paid jobs but has difficulties in justifying that of low-paid jobs. Classifying occupations according to their median wage in 1993, we analyze their employment growth until 2010, which is highest both in the top and in the bottom of the distribution, and lowest in the middle. Low-paid personnel services arise as the main factor responsible for the increase in the proportion of employment at the bottom of the wage distribution. We argue that population aging can explain the increased demand for personal services and thus the rise of employment in low-paid positions. Our argument goes as follows: goods and personal services are complementary for seniors. The decrease in the relative price of goods, induced by the progressive replacement of labor input in routine tasks by machines, is then associated with an increased demand for personal services if the proportion of seniors is increasing. We thus complement the existing literature on employment polarization by showing that demographic trends also play first order role.

Suggested Citation

  • Moreno-Galbis, Eva & Sopraseuth, Thepthida, 2014. "Job polarization in aging economies," Labour Economics, Elsevier, vol. 27(C), pages 44-55.
  • Handle: RePEc:eee:labeco:v:27:y:2014:i:c:p:44-55
    DOI: 10.1016/j.labeco.2013.12.001
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    References listed on IDEAS

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    Cited by:

    1. Sébastien Bock, 2018. "Job Polarization and Unskilled Employment Losses in France," PSE Working Papers halshs-01513037, HAL.
    2. James Harrigan & Ariell Reshef & Farid Toubal, 2016. "The March of the Techies: Technology, Trade, and Job Polarization in France, 1994-2007," CESifo Working Paper Series 5942, CESifo Group Munich.
    3. James Harrigan & Ariell Reshef & Farid Toubal, 2016. "The March of the Techies: Technology, Trade, and Job Polarization in France, 1994-2007," NBER Working Papers 22110, National Bureau of Economic Research, Inc.
    4. Sohei Kaihatsu & Maiko Koga & Tomoya Sakata & Naoko Hara, 2018. "Interaction between Business Cycles and Economic Growth," Bank of Japan Working Paper Series 18-E-12, Bank of Japan.
    5. Askenazy, Philippe & Erhel, Christine, 2015. "The French Productivity Puzzle," IZA Discussion Papers 9188, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Job polarization; Elasticity of substitution; Aging; Technological change;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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