IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

The dynamics of labor market polarization

  • Christopher L. Smith
Registered author(s):

    It has been well documented that the share of the working-age population employed in "middle-skill" occupations has been falling for some time, while the share in lower- and higher-skill jobs has been rising--i.e. "polarization" of the labor market (e.g. Autor 2010). However, the dynamics and related mechanism behind these employment trends are not fully understood; nor is it well understood what happens to workers who are displaced from middle-skill jobs. In this paper, I use data from the matched monthly CPS, the March CPS supplement, and the Displaced Worker Survey to answer two primary questions. First, into what employment states or occupations do unemployed persons who were formerly employed in low-, middle-, or high-skill occupations transition? Second, how have transitions between job types and employment states changed over time, and how have these changes contributed to trends in employment shares by job-type? I find that the decline in the share of workers in middle-skill jobs is due both to a decline in inflows into these jobs (particularly from non-employment and for younger workers) and because of a rise in outflows from these jobs (to non-employment and to other jobs); the increase in the share of workers in lower-skill jobs appears due to an increase in worker transitions from other job types (evident within all demographic groups); and the increase in the share of workers in higher-skill jobs appears due to an increase in worker transitions from other job types and is also somewhat compositional in nature (because there are more college-educated workers).

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2013-57.

    in new window

    Date of creation: 2013
    Date of revision:
    Handle: RePEc:fip:fedgfe:2013-57
    Contact details of provider: Postal: 20th Street and Constitution Avenue, NW, Washington, DC 20551
    Web page:

    More information through EDIRC

    Order Information: Web:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Francesca Mazzolari & Giuseppe Ragusa, 2013. "Spillovers from High-Skill Consumption to Low-Skill Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 74-86, March.
    2. Robert Shimer, 2007. "Reassessing the Ins and Outs of Unemployment," NBER Working Papers 13421, National Bureau of Economic Research, Inc.
    3. Kerwin Kofi Charles & Erik Hurst & Matthew J. Notowidigdo, 2013. "Manufacturing Decline, Housing Booms, and Non-Employment," NBER Working Papers 18949, National Bureau of Economic Research, Inc.
    4. Paul Beaudry & David A. Green & Benjamin M. Sand, 2013. "The Great Reversal in the Demand for Skill and Cognitive Tasks," NBER Working Papers 18901, National Bureau of Economic Research, Inc.
    5. Jaison R. Abel & Richard Deitz, 2012. "Job polarization and rising inequality in the nation and the New York-northern New Jersey region," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 18(Oct).
    6. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
    7. Guy Michaels & Ashwini Natraj & John Van Reenen, 2010. "Has ICT Polarized Skill Demand? Evidence from Eleven Countries over 25 Years," CEP Discussion Papers dp0987, Centre for Economic Performance, LSE.
    8. Regis Barnichon & Christopher J. Nekarda, 2012. "The Ins and Outs of Forecasting Unemployment: Using Labor Force Flows to Forecast the Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 83-131.
    9. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
    10. Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics 20002, London School of Economics and Political Science, LSE Library.
    11. Nir Jaimovich & Henry E. Siu, 2012. "The Trend is the Cycle: Job Polarization and Jobless Recoveries," NBER Working Papers 18334, National Bureau of Economic Research, Inc.
    12. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:2013-57. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.