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Polarization, employment and the minimum wage: Evidence from European local labor markets

Author

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  • Paul Maarek

    (LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - UP2 - Université Panthéon-Assas)

  • Elliot Moiteaux

    (THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

Abstract

The labor market is becoming increasingly polarized as routine jobs disappear. In the flexible US labor market, this has had a limited impact on employment due to the strong employment growth in low-paying manual occupations for workers who are not able to reallocate to high-paying abstract occupations. This may not be the case in some rigid wage European economies, which are capable of creating fewer low-paying manual jobs. We study the effect of a decrease in the proportion of routine jobs on employment and participation rates, conditionally on the level of the minimum wage, in European local labor markets. Our OLS and IV estimates show that the polarization process has a negative impact on employment and participation rates in high minimum wage countries only.
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Suggested Citation

  • Paul Maarek & Elliot Moiteaux, 2021. "Polarization, employment and the minimum wage: Evidence from European local labor markets," Post-Print hal-04120471, HAL.
    • Handle: RePEc:hal:journl:hal-04120471
    DOI: 10.1016/j.labeco.2021.102076
    Note: View the original document on HAL open archive server: https://univ-pantheon-assas.hal.science/hal-04120471
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    References listed on IDEAS

    as
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    Cited by:

    1. Roupakias, Stelios, 2023. "Employment polarization: evidence from regions in Greece," MPRA Paper 118696, University Library of Munich, Germany.
    2. Huanan Liu & Yan Wang & Zhoufu Yan, 2024. "Artificial Intelligence and Food Processing Firms Productivity: Evidence from China," Sustainability, MDPI, vol. 16(14), pages 1-18, July.
    3. Sasiwimon Warunsiri Paweenawat & Lusi Liao, 2022. "Brain over Brawn: Job Polarization, Structural Change, and Skill Prices," PIER Discussion Papers 189, Puey Ungphakorn Institute for Economic Research.

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    More about this item

    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
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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