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Explaining Job Polarization in Europe: The Roles of Technology, Globalization and Institutions

Author

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  • Maarten Goos
  • Alan Manning
  • Anna Salomons

Abstract

This paper shows the employment structure of 16 European countries has been polarizing in recent years with the employment shares of managers, professionals and low-paid personal services workers increasing at the expense of the employment shares of middling manufacturing and routine office workers. To explain this job polarization, the paper develops and estimates a simple model to capture the effects of technology, globalization, institutions and product demand effects on the demand for different occupations. The results suggest that the routinization hypothesis of Autor, Levy and Murnane (2003) is the single most important factor behind the observed shifts in employment structure. We find some evidence for offshoring to explain job polarization although its impact is much smaller. We also find that shifts in product demand are acting to attenuate the polarizing impact of routinization and that differences or changes in wage-setting institutions play little role in explaining job polarization in Europe.

Suggested Citation

  • Maarten Goos & Alan Manning & Anna Salomons, 2010. "Explaining Job Polarization in Europe: The Roles of Technology, Globalization and Institutions," CEP Discussion Papers dp1026, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1026
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    Citations

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    Cited by:

    1. Evangelia Vourvachaki & Vahagn Jerbashian & : Sergey Slobodyan, 2014. "Specific and General Human Capital in an Endogenous Growth Model," CERGE-EI Working Papers wp520, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Grafström, Jonas, 2017. "Technological Change and Wage Polarization – The Illiberal Populist Response," Ratio Working Papers 294, The Ratio Institute.
    3. Maria Grazia Pittau & Riccardo Massari & Roberto Zelli, 2013. "Hierarchical Modelling of Disparities in Preferences for Redistribution," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 556-584, August.
    4. Leonardi, Marco, 2010. "The Effect of Product Demand on Inequality: Evidence from the US and the UK," IZA Discussion Papers 5011, Institute for the Study of Labor (IZA).
    5. Binelli Chiara, 2015. "How the wage-education profile got more convex: evidence from Mexico," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(2), pages 509-560, July.
    6. Damiaan Persyn & Wouter Torfs, 2013. "A gravity equation for commuting - with an application to estimating regional and language border effects in Belgium," ERSA conference papers ersa13p599, European Regional Science Association.
    7. Dengler, Katharina & Matthes, Britta, 2015. "Folgen der Digitalisierung für die Arbeitswelt : Substituierbarkeitspotenziale von Berufen in Deutschland," IAB-Forschungsbericht 201511, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Nuno Crespo & Nádia Simões & José Castro Pinto, 2013. "Determinant factors of job quality in Europe," Working Papers Series 2 13-01, ISCTE-IUL, Business Research Unit (BRU-IUL).
    9. Pekkala Kerr, Sari & Maczulskij, Terhi & Maliranta, Mika, 2016. "Within and Between Firm Trends in Job Polarization: Role of Globalization and Technology," ETLA Working Papers 41, The Research Institute of the Finnish Economy.
    10. Ortega, Javier & Verdugo, Gregory, 2014. "The impact of immigration on the French labor market: Why so different?," Labour Economics, Elsevier, vol. 29(C), pages 14-27.
    11. Philipp Ehrl, 2014. "Task trade and the employment pattern: the offshoring and onshoring of Brazilian firms," Working Papers 151, Bavarian Graduate Program in Economics (BGPE).
    12. Neil Foster-McGregor & Mario Holzner & Michael Landesmann & Johannes Pöschl & Robert Stehrer & Roman Stöllinger, 2013. "A ‘Manufacturing Imperative’ in the EU – Europe's Position in Global Manufacturing and the Role of Industrial Policy," wiiw Research Reports 391, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    Labor Demand; Technology; Globalization; Institutions;

    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

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