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

Author

Listed:
  • 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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    Cited by:

    1. Philipp Ehrl, 2018. "Task trade and employment patterns: The offshoring and onshoring of Brazilian firms," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 27(3), pages 235-266, April.
    2. Enrique Fernandez-Macias & Martina Bisello, 2020. "A Taxonomy of Tasks for Assessing the Impact of New Technologies on Work," JRC Working Papers on Labour, Education and Technology 2020-04, Joint Research Centre (Seville site).
    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. 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.
    5. Ronald B. Davies & Rodolphe Desbordes, 2015. "Greenfield FDI and skill upgrading: A polarized issue," Canadian Journal of Economics, Canadian Economics Association, vol. 48(1), pages 207-244, February.
    6. Terhi Maczulskij & Mika Maliranta & Sari Pekkala Kerr, 2016. "Within and Between Firm Trends in Job Polarization: Role of Globalization and Technology," Working Papers 308, Palkansaajien tutkimuslaitos, Labour Institute for Economic Research.
    7. Kobayashi, Toru & Yamamoto, Isamu, 2020. "Job tasks and wages in the Japanese labor market: Evidence from wage functions," Journal of the Japanese and International Economies, Elsevier, vol. 58(C).
    8. 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.
    9. Charles M. Beach, 2016. "Changing income inequality: A distributional paradigm for Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1229-1292, November.
    10. 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.
    11. Grafström, Jonas, 2017. "Technological Change and Wage Polarization – The Illiberal Populist Response," Ratio Working Papers 294, The Ratio Institute.
    12. Leonardi, Marco, 2010. "The Effect of Product Demand on Inequality: Evidence from the US and the UK," IZA Discussion Papers 5011, Institute of Labor Economics (IZA).
    13. René Böheim & Michael Christl, 2021. "Mismatch unemployment in Austria: The role of regional labour markets for skills," JRC Working Papers on Labour, Education and Technology 2021-08, Joint Research Centre (Seville site).
    14. 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.
    15. 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.
    16. 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].
    17. 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).
    18. Luciana Aimone Gigio, & Silvia Camussi & Vincenzo Maccarrone, 2021. "Changes in the employment structure and in job quality in Italy: a national and regional analysis," Questioni di Economia e Finanza (Occasional Papers) 603, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Labor Demand; Technology; Globalization; Institutions;
    All these keywords.

    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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