Maximilian Wenzel, Freie Universität Berlin - De-routinization of Jobs and Polarization of Earnings – Evidence from 35 Countries around the World
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Title: De-routinization of Jobs and Polarization of Earnings – Evidence from 35 Countries around the World
Abstract: The job polarization hypothesis suggests a u-shaped pattern of employment growth along the wage/skill distribution, which is driven by simultaneous growth in the employment of high-skill/high-wage and low-skill/low-wage occupations due to routine-biased technological change [Acemoglu and Autor, 2011]. An aspect of both high social and political relevance is the implications of job polarization and technological change for wage and earnings distributions, with the displacement of routine workers and changing returns to skills and occupations. The present paper makes two contributions. First, using a novel harmonized dataset provided by the Luxembourg Income Study. We test the job polarization hypothesis for 35 countries around the world. Second, we provide an in-depth analysis of the distributional implications of job polarization and technological change for earnings. We find evidence for employment polarization in 29 out of the 35 countries under analysis, in both developed and developing economies. However, the effects of this displacement in the workforce do not have polarizing effects on the earnings structure once we account for between and within variation in occupational classes returns. Our results, therefore, indicate that routine biased technological change (RBTC) is a weak predictor of earnings growth and inequality.
Presenter: Maximilian Wenzel, Freie Universität Berlin
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