A note on employment and wage polarization in U.S.

We compare employment and wage polarization in the U.S. using different sample periods, occupations classification and the inclusion or not of agricultural occupations. We report two main findings. First, we show that employment polarization can emerge together or without wage polarization, depending on the sample period considered. Second, we show that removing agricultural occupations changes the timing of employment polarization, making it emerge earlier, and substantially increases the degree of both employment and wage polarization with respect to the case in which they are included in the sample

The role of gender in employment polarization

We document that U.S. employment polarization in the 1980-2008 period is largely generated by women. Female employment shares increase both at the bottom and at the top of the skill distribution, generating the typical U-shape polarization graph, while male employment shares decrease in a more similar fashion along the whole skill distribution. We show that a canonical model of skill-biased technological change augmented with a gender dimension, an endogenous market/home labor choice and a multi-sector environment accounts well for gender and overall employment polarization. The model also accounts for the absence of employment polarization during the 1960- 1980 period and broadly reproduces the different evolution of employment shares across decades during the 1980-2008 period. The faster growth of skill-biased technological change since the 1980s accounts for most of the employment polarization generated by the model

The role of gender in employment polarization

We document that employment polarization in the 1980-2008 period in the U.S. is largely generated by women. For the latter, employment shares increase both at the bottom and at the top of the skill distribution, generating the typical U-shape polarization graph, while for men employment shares decrease in a similar fashion along the whole skill distribution. We show that a canonical model of skill-biased technological change augmented with a gender dimension, an endogenous market/home labor choice and a multi-sector environment accounts well for gender and overall employment polarization. The model also accounts for the absence of employment polarization during the 1960-1980 period, which is due to the flat behavior of changes in women’s employment shares along the skill distribution, and can reproduce the different evolution of employment shares across decades during the 1980-2008 period. The faster growth of skill-biased technological change since the 1980s accounts for a substantial part of the employment polarization generated by the model

Employment polarization and the role of the apprenticeship system

This paper studies the effects of the apprenticeship system on innovation and labor market polarization. A stylized model with two key features is developed: (1) apprentices are more productive due to industry-specific training, but (2) from the firm’s perspective, when training apprentices, technological innovation is costly since training becomes obsolete. Thus, apprentices correlate with slower adoption of skill-replacing technologies, but also less employment polarization. We test this hypothesis on German regions given local variation in apprenticeship systems until 1976. The results shows no employment polarization related to apprentices, but similar displacement of non-apprentices as in the US

Math matters: education choices and wage inequality

SBTC is a powerful mechanism in explaining the increasing gap between educated and uneducated wages. However, SBTC cannot mimic the US within-group wage inequality. This paper provides an explanation for the observed intra-college group inequality by showing that the top decile earners' significant wage growth is underpinned by the link between ex ante ability, math-heavy college majors and highly quantitative occupations. We develop a general equilibrium model with multiple education outcomes, where wages are driven by individuals' ex ante abilities and acquired math skills. A large portion of within-group and general wage inequality is explained by math-biased technical change (MBTC)

Brain versus brawn: the realization of women's comparative advantage

In the last decades the US economy experienced a rise in female labor force participation, a reversal of the gender education gap and a closing of the gender wage gap. Importantly, these changes occurred at a substantially different pace over time. During the same period, workers in the US faced a considerable shift in labor demand from more physical to more intellectual skill requirements. I rationalize these observations in the context of a general equilibrium model displaying two key assumptions: (1) the demand for brain increases both within and across education groups; and (2) women have less brawn than men. Given the observed US technical change process, the model replicates (1) over half of the narrowing gender wage gap, (2) most of the narrowing employment gap, and (3) all of the reversing education gap. Crucially, the model can also account for the time-varying-path of the narrowing gender divide with an initial stagnation and a later acceleration in female wages and education rates

The evolution of women's choices in the macroeconomy

textVarious macroeconomic effects resulted from the changing economic and societal structure in the second half of the 20th century, which greatly impacted women's economic position in the United States. Using dynamic programming as the main modeling tool, and U.S. data for factual evidence, three papers are developed to test the validity of three related hypotheses focusing on female employment, education, marriage, and divorce trends. The first chapter estimates how much of the post-World War II evolution in employment and average wages by gender can be explained by a model where changing labor demand requirements are the driving force. I argue that a large fraction of the original female employment and wage gaps in mid-century, and the subsequent shrinking of both gaps, can be explained by labor reallocation from brawn-intensive to brain-intensive jobs favoring women's comparative advantage in brain over brawn. Thus, aggregate gender-specific employment and wage gap trends resulting from this labor reallocation are simulated in a general equilibrium model. The material in the second chapter is based on an ongoing joint project with Fatih Guvenen. We argue for a strong link between the rise in the proportion of educated women and the evolution of the divorce rate since mid-century. As women become increasingly educated their bargaining power within marriage rises and their economic situation in singlehood improves making marriage less attractive and divorce more attractive. Similarly, a change in the divorce regime (e.g., U.S. unilateral divorce laws in the 1970s), making marriages less stable, incentivizes women to seek education as insurance against the higher divorce risk. A framework that models the interdependence between education, marriage and divorce is developed, simulated, and contrasted against United States data evidence. The third chapter considers the implications of marital uncertainty on aggregate household savings behavior. To this end, an infinite horizon model withperpetual youth that features uncertainty over marriage quality is developed. Similarly to Cubeddu and Ríos-Rull (1997), I test how much of the savings rate decline from the 1960s to the 1980s can be explained by the changing United States demographic composition, specifically the rise in divorce rates and the fall in marriage rates.Economic

Employment polarization and the role of the apprenticeship system

This paper studies the effects of the apprenticeship system on innovation and labor market polarization. A stylized model with two key features is developed: (1) apprentices are more productive due to industry-specific training, but (2) from the firm’s perspective, when training apprentices, technological innovation is costly since training becomes obsolete. Thus, apprentices correlate with slower adoption of skillreplacing technologies, but also less employment polarization. We test this hypothesis on German regions given local variation in apprenticeship systems until 1976. The results shows no employment polarization related to apprentices, but similar displacement of non-apprentices as in the US

Employment polarization and the role of the apprenticeship system

This paper studies the effect of apprenticeship training on technology adoption and labor market polarization. A stylized model with two key features is developed: (1) apprentices are more productive due to industry-specific training, but (2) from the firm׳s perspective, when training apprentices, technological innovation is costly since training becomes obsolete. Thus, apprentices correlate with slower adoption of skill-replacing technologies, but also less employment polarization. We test this hypothesis on German regions given local variation in apprenticeship systems until 1976. The results show little computer adoption and no employment polarization related to apprentices, but similar displacement of non-apprentices by computers as in the US