The Polarization of Employment in German Local Labor Markets

This paper uses the task-based view of technological change to study employment and wage polarization at the level of local labor markets in Germany between 1979 and 2007. In order to directly relate technological change to subsequent employment trends, we exploit variation in the regional task structure which reflects a region’s potential of being affected by computerization. We build a measure of regional routine intensity to test whether there has been a reallocation from routine towards non-routine labor conditional on a region’s initial computerization potential. We find that routine intensive regions have witnessed a differential reallocation towards non-routine employment and an increase in low- and medium-skilled service occupations. Our results corroborate the predictions of the task-based framework and confirm previous evidence on employment polarization in Germany in the sense that employment growth deteriorates at the middle of the skill distribution relative to the lower and the upper tail of the distribution.Job Tasks, Polarization, Technological Change, Service Occupations, Regional Labor Markets

Small cities face greater impact from automation

The city has proven to be the most successful form of human agglomeration and provides wide employment opportunities for its dwellers. As advances in robotics and artificial intelligence revive concerns about the impact of automation on jobs, a question looms: How will automation affect employment in cities? Here, we provide a comparative picture of the impact of automation across U.S. urban areas. Small cities will undertake greater adjustments, such as worker displacement and job content substitutions. We demonstrate that large cities exhibit increased occupational and skill specialization due to increased abundance of managerial and technical professions. These occupations are not easily automatable, and, thus, reduce the potential impact of automation in large cities. Our results pass several robustness checks including potential errors in the estimation of occupational automation and sub-sampling of occupations. Our study provides the first empirical law connecting two societal forces: urban agglomeration and automation's impact on employment

More information, better jobs? : occupational stratification and labor market segmentation in the United States' information labor force

This article examines the mix of good and bad jobs in the restructuring of United States' labor markets for information work between 1900 and 1980. ls the information sector still growing relative to other occupational sectors? What is the relative proportion of good to bad jobs in the information sector today? ls the mix of good bad jobs within the information sector changing over time? To answer these questions, we examine changes in the relative size of the information sector's labor markers and changes in five occupational strata within it - professional, semiprofessional, supervisory and upper-level sales personnel, clerks, and blue-collar workers.The information occupations mushroomed in size from 17% of the United States workforce in 1900 to over 50% in 1980. Information sector jobs vary widely in quality. Few information sector jobs are fully professional, and clerical jobs form the largest single occupational stratum. When we examined the growth of the various strata between 1900 and 1980, we found that clerical jobs became more dominant, not less dominant. But this distribution has been masked by the steady growth of information sector jobs in the highly professional and semiprofessional strata, as well as clerical jobs. The occupational stratum between clerks and semiprofessionals - the supervisory and upper-level sales workers - has steadily declined in relative size.Two lower strata - clerks and sales and supervisory workers - account for 55% of the jobs in the information sector. Our data suggest that information labor markets are divided into relatively impermeable segments. As the information sector expanded, it took on many characteristics of the overall economy. It includes a mix of jobs that are diverse in their pay, status, and power. Its internal divisions reflect patterns of segmentation that have developed elsewhere in the society - a dual labor market. Overall, the information sector has become sufficiently large that it is not an alternative to the dominant social order - it simply reproduces many of its features

Computerization and Rising Unemployment Duration

With a given unemployment rate, duration of joblessness can vary substantially. The unemployment rate will be the same if four million workers are unemployed for three months on average, as when one million workers loose their jobs for a full year. Yet the consequences for the mental state of the people without jobs, for their behavior, and for the functioning of society are probably far more severe when the average period between jobs is much longer. The authors turn next to their main empirical study, the multivariate regression analysis, to sort out the effects of technological, institutional, and demographic variables on changes in unemployment duration. The analysis is based on aggregate time-series data for the US, covering the period from 1948 to 1997. The duration of unemployment has risen rather dramatically over the last half century. The percentage of unemployed workers out of work 15 or more weeks more than doubled over the same period, while the percentage of the unemployed out of work 27 or more weeks tripled.

The Polarization of the U.S. Labor Market

This paper analyzes a marked change in the evolution of the U.S. wage structure over the past fifteen years: divergent trends in upper-tail (90/50) and lower-tail (50/10) wage inequality. We document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years (since 1980). Wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987, but it has ceased growing (and for some measures actually narrowed) since the late 1980s. Furthermore we find that occupational employment growth shifted from monotonically increasing in wages (education) in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage (education) distribution in the 1990s. We characterize these patterns as the %u201Cpolarization%u201D of the U.S. labor market, with employment polarizing into high-wage and low-wage jobs at the expense of middle-wage work. We show how a model of computerization in which computers most strongly complement the non-routine (abstract) cognitive tasks of high-wage jobs, directly substitute for the routine tasks found in many traditional middle-wage jobs, and may have little direct impact on non-routine manual tasks in relatively low-wage jobs can help explain the observed polarization of the U.S. labor market.

Do Information and Communication Technologies Empower Female Workers? Firm-Level Evidence from Viet Nam

This paper studies the effects of firms’ investments in information and communication technologies (ICT) on their demand for female and skilled workers. Using the gradual liberalization of the broadband Internet sector across provinces from 2006 to 2009 as a source of exogenous variation to identify the causal impacts of ICT, we find evidence from the country’s comprehensive enterprise survey data that firms’ adoption of broadband Internet and other related ICT increased their relative demand for female and college-educated workers. The effect of ICT on firms’ female employment is particularly strong among the college-educated workers, and is stronger in industries that are more dependent on highly manual and physical tasks. These results suggest that ICT can lower gender inequality in the labor market by shifting the labor demand from highly manual, routine tasks in which men have a comparative advantage toward more nonroutine, interactive tasks in which women hold a comparative advantage. However, the effect of ICT is weaker in industries relying more on complex and interactive tasks, suggesting that gender differences in education may have limited female labor supply for the most innovative industries that require highly technical skills to complement ICT

The Change of Job Opportunities: the Role of Computerization and Institutions

This paper studies the pattern of job opportunities over the last two decades in European countries. We find that the share of high-skilled jobs have been expanding over time, while the share of medium- skilled jobs have been declining. These changes are in line with the US patterns and, according to the previous literature, they come from recent technological changes. However, our data show an interesting difference between the US and Europe: in Europe there is not any increase in the share of low-skilled employment. Moreover, we find that the difference between the proportion of employment hired in low-skilled and medium-skilled jobs is negatively correlated with both the unemployment rate and the degree of employment protection in the labour market. We propose a theoretical model to study the effects of a technological shock on the employment structure in a unionized economy. By accounting for the collective bargaining process, our model may fit Continental Europe better than the previous ones. We conclude that the definition of the union policy is crucial in order to explain observed cross-country heterogeneity in low-skilled employment.

Does the Sector Bias of Skill-Biased Technical Change Explain Changing Wage Inequality?

This paper examines whether the sector bias of skill-biased technical change (sbtc) explains changing skill premia within countries in recent decades. First, using a two-factor, two-sector, two-country model we demonstrate that in many cases it is the sector bias of sbtc that determines sbtc's effect on relative factor prices, not its factor bias. Thus, rising (falling) skill premia are caused by more extensive sbtc in skill-intensive (unskill-intensive) sectors. Second, we test the sector-bias hypothesis using industry data for many countries in recent decades. An initial consistency check strongly supports the hypothesis. Among ten countries we find a strong correlation between changes in skill premia and the sector bias of sbtc during the 1970s and 1980s. The hypothesis is also strongly supported by more structural estimation on U.S. and U.K. data of the economy-wide wage changes mandated' to maintain zero profits in all sectors in response to the sector bias of sbtc. The suggestive mandated-wage estimates match the direction of actual wage changes in both countries during both the 1970s and the 1980s. Thus, the empirical evidence strongly suggests that the sector bias of sbtc can help explain changing skill premia.

Rising Wage Inequality and Postgraduate Education

This paper considers what has hitherto been a relatively neglected subject in the wage inequality literature, albeit one that has been becoming more important over time, namely the role played by increases in postgraduate education. We document increases in the number of workers with a postgraduate qualification in the United States and Great Britain. We also show their relative wages have risen over time as compared to all workers and more specifically to graduates with only a college degree. Consideration of shifts in demand and supply shows postgraduates and college only workers to be imperfect substitutes in production and that there have been trend increases over time in the relative demand for postgraduate vis-à-vis college only workers. These relative demand shifts are significantly correlated with technical change as measured by changes in industry computer usage and investment. Moreover, the skills sets possessed by postgraduates and the occupations in which they are employed are significantly different to those of college only graduates. Over the longer term period when computers have massively diffused into workplaces, it turns out that the principal beneficiaries of this computer revolution has not been all graduates, but those more skilled workers who have a postgraduate qualification. This has been an important driver of rising wage inequality amongst graduates over time.wage inequality, postgraduate education, computers