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Abstract
In the 1990s the idea of skill-biased technological change (SBTC) was used to understand the shift in employment toward more educated workers. However, in recent years, it has become apparent that a more nuanced approach is needed. The idea of SBTC might lead one to predict a uniform shift in employment away from low-skilled and toward high-skilled occupations, but studies for the United States (Autor, Katz, and Kearney 2006) and the United Kingdom (Goos and Manning 2007) have shown that there is growth in employment in both the highest-skilled (professional and managerial) and lowest-skilled (personal services) occupations, with declining employment in the middle of the distribution (manufacturing and routine office jobs). This is what Goos and Manning (2007) term job polarization (although see the introduction to Goos and Manning 2007 for antecedents of these ideas).
There are several hypotheses about the reasons for job polarization. First, the “routinization” hypothesis (first put forward by Autor, Levy, and Murnane 2003) suggests that the effect of technological progress is to replace “routine” labor which tends to be clerical and craft jobs in the middle of the wage distribution. Second, there is the view that globalization in general, and offshoring in particular, is an important source of change in the job structure in the richest countries. Third, there may be a link between job polarization and wage inequality. The rise in the share of income going to the rich in the United States and the United Kingdom may have led to an increase in demand for low-skill workers whose employment increasingly consists of providing services to the rich.
One thing that is not clear from the existing literature is how pervasive is the phenomenon of job polarization. Therefore, this paper shows evidence for job polarization in 16 Western European countries for the period 1993-2006.
Citation
Goos, M., Manning, A. and A. Salomons. 2009. “Job Polarization in Europe”. American Economic Review P&P. 99(2): 58–63.