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Job Polarization and Structural Change

Author

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  • Zsofia Barany

    (Département d'économie)

  • Christian Siegel

    (University of Kent)

Abstract

We document that job polarization—contrary to the consensus—has started as early as the 1950s in the United States: 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 50 years.

Suggested Citation

  • Zsofia Barany & Christian Siegel, 2018. "Job Polarization and Structural Change," Sciences Po publications info:hdl:2441/4t83lre9hm9, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/4t83lre9hm91sq006n4940n19s
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    More about this item

    Keywords

    Job Polarization; Structural Change; Roy Model;
    All these keywords.

    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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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