Working Papers
De-Routinization of Jobs and Polarization of Earnings: Evidence from 35 Countries
No.
1397
Publisher
ERF
Date
June, 2020
Topic
J13 Fertility
J8. Labor Standards: National and International
D3. Distribution
The job polarization hypothesis suggests a U-shaped pattern of employment growth along the earnings/skill distribution, which is driven by simultaneous growth in the employment of highskill/high-earnings and low-skill/low-earnings occupations due to Routine-Biased Technological Change (RBTC) [Acemoglu and Autor, 2011]. An aspect of both high social and political relevance is the implications of job polarization and technological change for earnings distributions. In this paper, we put the RBTC trend into perspective by decomposing earnings growth into parts attributable to job polarization and other components. Using a novel
harmonized dataset provided by the Luxembourg Income Study and the Economic Research Forum, we find evidence for employment polarization in 30 out of the 35 countries under analysis, in both developed and developing economies. However, the effects of this displacement in the workforce have no polarizing effect on the earnings distribution in 33 countries, once we account for between and within variation in occupational classes returns.
Authors
Maximilian Longmuir
Freie Universität Berlin
Authors
Carsten Schröder
Freie Universität Berlin
Authors
Matteo Targa
Freie Universität Berlin