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

  • David H. Autor
  • David Dorn

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 National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15150.

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Date of creation: Jul 2009
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Publication status: published as David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-97, August.
Handle: RePEc:nbr:nberwo:15150
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