The Determinants of Regional Disparities in Skill Segregation: Evidence from German Regions

Labour markets in most highly developed countries are characterised by increasing inequalities in qualifications-specific employment prospects. Nickel and Bell (1995) for example find that the demand for high-skilled workers is steadily rising, while low-skilled employment is subject to a considerable decline in many countries of the OECD. On the one hand, this might be explained by a growing supply of skills due to the educational expansion in the 1960s and 1970s. On the other hand, it can be argued, that the increasing international division of labour together with technological and organisational change have been leading to a unilateral rise in the demand for high-skilled labour whereas the low-skilled compete increasingly with workers in low-wages countries (see Wood 1994, 2002). Furthermore, as a consequence of skill-biased technological and organisational changes more and more less qualified workers do not meet the increasing requirements of jobs on the domestic labour market (see Acemoglu 1998, 2002; Lindbeck and Snower 1996; Spitz-Oener 2006). Some authors also find evidence for a polarisation in skill-specific employment. Autor et al. (2003) hypothesise that highly standardised occupations of medium-skilled employees, such as book- and record-keeping, may be displaced more easily by technological innovations, e.g. by computer programmes, than comparatively simple and less standardised jobs, such as cleaning. Further empirical evidence for this hypothesis is provided by Manning (2004) or Goos and Manning (2007) for the UK and Spitz-Oener (2006) for Germany.