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The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market

Listed author(s):
  • Autor, David

    ()

    (MIT)

  • Dorn, David

    ()

    (University of Zurich)

We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7068.

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Length: 58 pages
Date of creation: Dec 2012
Publication status: published in: American Economic Review, 2013, 103 (5), 1553-1597
Handle: RePEc:iza:izadps:dp7068
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  5. David H. Autor & Alan Manning & Christopher L. Smith, 2016. "The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 58-99, January.
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  24. Daron Acemoglu & David H. Autor & David Lyle, 2002. "Women, War and Wages: The Effect of Female Labor Supply on the Wage Structure at Mid-Century," NBER Working Papers 9013, National Bureau of Economic Research, Inc.
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