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Session12 Goos .pdf

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Author: Dyczek, Weronika (Stud. SBE)

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Marten Goos, Alan Manning & Anna Salomons

Job Polarization in Europe
By Weronika Dyczek, i6129478

Recent years have showed that the skill-biased technological change (SBTC) approach
explaining the uniform shifts in employment away from low-skilled workers and toward highskill occupations is no longer accurate. Research for US and UK has shown a growth in both
high and low-skilled occupations with declining trend in the middle of the distribution. This
pattern is known as the Job Polarization.
3 hypotheses explaining the reason for Job Polarization:
1 “Routinization” Hypothesis = effect of technological progress is to replace “routine”
labour (jobs in the middle of wage distribution)
2 Globalization Hypothesis = globalization and offshoring treated as a main source of
change in the job structure of the richest countries
3 Wage inequality Hypothesis = increase in the share of income going to the rich
increases the demand for low-skill workers whose employment consists of providing
services to the rich

Table 1 shows that high-paid and several lowest-paid jobs are the fastest growing ones when
the middle occupations have experienced relative declines, confirming the idea of Job

Figure 1 shows a pattern of polarization, with high- and low-paying occupations expanding
their employment shares relative to the occupations paying close to the mean wage.
However, using here the log mean wages to illustrate the employees’ skills is biased, since it is
not always true and the relation between wages and skills are not the same in different
countries. The circles represent employment in specific sector, so the bigger circle the larger
employment in this sector.

All 3 graphs above are showing evidence of job polarization and existence of the “hollowing
out” in jobs, but there are differences in time spans they present. Figure 8 shows that
polarization is the clearest in 1990 to 2007 and together with figure 5 use measures of skills
on the horizontal axis, which are more representable than the mean wages used in figure 1.

Table 2 shows that employment is polarizing in all countries except Portugal.

3 measures of the tasks of the types of tasks contained in an occupation to capture the
“Routinization” Hypothesis:
1 Abstract tasks = intense in non-routine cognitive skills (high-paid)
2 Routine tasks = cognitive and non-cognitive skills (middle-paid)
3 Service tasks = non-routine non-cognitive skills (low-paid)

Figure 2 presents the regression analysis and shows that there is no strong relationship
between the changes in wage inequality and changes in employment share - the dots are
scattered all over the place.

The 1st column of table 3 includes variables related to all of the factors considered in the
paper and shows that the evidence is strongest for the Routinization Hypothesis. 2nd column
retains only variables that were found the be significant. The ubiquitous job polarization is
consistent with the evidence that in developed countries, technologies are becoming more
and more intense in using non-routine tasks focused on high- and low-paid tasks, at the
expense of routine tasks.

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