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Job Polarization and Structural Change

Author

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  • Zsofia Barany

    (Département d'économie)

  • Christian Siegel

    (University of Exeter)

Abstract

We document that job polarization – contrary to the consensus – has started as early as the 1950s in the US: middle-wage workers have been losing both in terms of employment and average wage growth compared to low- and high-wage workers. Given that polarization is a long-run phenomenon and closely linked to the shift from manufacturing to services, we propose a structural change driven explanation, where we explicitly model the sectoral choice of workers. Our simple model does remarkably well not only in matching the evolution of sectoral employment, but also of relative wages over the past fifty years.

Suggested Citation

  • Zsofia Barany & Christian Siegel, 2015. "Job Polarization and Structural Change," Sciences Po publications info:hdl:2441/4he5e8ba392, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/4he5e8ba3929rhrgcti3so9af
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    Cited by:

    1. Vahagn Jerbashian, 2016. "Automation and Job Polarization: On the Decline of Middling Occupations in Europe," UB Economics Working Papers 2016/348, Universitat de Barcelona, Facultat d'Economia i Empresa, UB Economics.
    2. repec:gam:jsusta:v:10:y:2018:i:4:p:1219-:d:141496 is not listed on IDEAS
    3. Hemous, David & Olsen, Morten, 2014. "The Rise of the Machines: Automation, Horizontal Innovation and Income Inequality," CEPR Discussion Papers 10244, C.E.P.R. Discussion Papers.
    4. Fabio Cerina & Alessio Moro & Michelle Petersen Rendall, 2016. "The Role of Gender in Employment Polarization," Discussion Papers 1704, Centre for Macroeconomics (CFM), revised Jan 2017.
    5. Barany, Zsofia L. & Siegel, Christian, 2017. "Disentangling Occupation- and Sector-specific Technological Change," Economics Series 331, Institute for Advanced Studies.
    6. Natalija Novta & Evgenia Pugacheva, 2018. "Manufacturing Jobs: Implications for Income Inequality," LIS Working papers 736, LIS Cross-National Data Center in Luxembourg.
    7. Hans Gersbach & Jean-Charles Rochet & Martin Scheffel, 2017. "Financial Intermediation, Capital Accumulation and Crisis Recovery," Swiss Finance Institute Research Paper Series 17-38, Swiss Finance Institute.
    8. Zsófia L. Bárány & Christian Siegel, 2018. "Job Polarization and Structural Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 57-89, January.
    9. Böhm, Michael, 2014. "The Wage Effects of Job Polarization: Evidence from the Allocation of Talents," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100547, Verein für Socialpolitik / German Economic Association.
    10. Lee, Tim & Shin, Yongseok, 2017. "Horizonatal and Vertical Polarization: Task-Specific Technological Change in a Multi-Sector Economy," TSE Working Papers 17-800, Toulouse School of Economics (TSE).
    11. Sara Amoroso & Pietro Moncada-Paternò-Castello, 2018. "Inward Greenfield FDI and Patterns of Job Polarization," Sustainability, MDPI, Open Access Journal, vol. 10(4), pages 1-20, April.
    12. Zsófia L. Bárány & Christian Siegel, 2018. "Job Polarization and Structural Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(1), pages 57-89, January.
    13. Yongseok Shin & Tim Lee, 2016. "Managing a Polarized Structural Change," 2016 Meeting Papers 1464, Society for Economic Dynamics.
    14. André Cieplinski, 2017. "Employee Control, Work Content and Wages," Department of Economics University of Siena 775, Department of Economics, University of Siena.
    15. Wan-Jung Cheng, 2017. "Explaining Job Polarization: The Role of Heterogeneity in Capital Intensity," IEAS Working Paper : academic research 17-A015, Institute of Economics, Academia Sinica, Taipei, Taiwan, revised Feb 2018.
    16. Sevinç, Orhun, 2017. "Skill-biased technical change and Labor market polarization:the role of skill heterogeneity within occupations," LSE Research Online Documents on Economics 86147, London School of Economics and Political Science, LSE Library.
    17. Todd Schoellman & Bart Hobijn, 2017. "Structural Transformation by Cohort," 2017 Meeting Papers 1417, Society for Economic Dynamics.
    18. Zsofia Barany & Christian Siegel, 2018. "Biased Technological Change and Employment Reallocation," Sciences Po publications info:hdl:2441/7vl4otetog8, Sciences Po.
    19. Böhm, Michael Johannes, 2017. "The Price of Polarization: Estimating Task Prices under Routine-Biased Technical Change," IZA Discussion Papers 11220, Institute for the Study of Labor (IZA).
    20. Giovanni Gallipoli & Christos A. Makridis, 2017. "Structural Transformation and the Rise of Information Technology," Working Paper series 17-30, Rimini Centre for Economic Analysis.
    21. Georg Duernecker & Berthold Herrendorf, 2017. "Structural Transformation of Occupation Employment," 2017 Meeting Papers 1239, Society for Economic Dynamics.
    22. Albertini, Julien & Hairault, Jean-Olivier & Langot, François & Sopraseuth, Thepthida, 2017. "A Tale of Two Countries: A Story of the French and US Polarization," IZA Discussion Papers 11013, Institute for the Study of Labor (IZA).
    23. Orhun Sevinc, 2017. "Skill-Biased Technical Change and Labor Market Polarization: The Role of Skill Heterogeneity Within Occupations," Discussion Papers 1728, Centre for Macroeconomics (CFM).

    More about this item

    Keywords

    Job Polarization; Structural Change; Roy Model;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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