The growth of low skill service jobs and the polarization of the US labor market

Arbeitspapier

We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7068

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Wage Level and Structure; Wage Differentials ; Job, Occupational, and Intergenerational Mobility; Promotion ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: skill demand ; job tasks ; inequality ; polarization ; technological change ; occupational choice ; service occupations ; Ungelernte Arbeitskräfte ; Dienstleistungsberufe ; Qualifikation ; Anforderungsprofil ; Arbeitsnachfrage ; Automatisierung ; Soziale Ungleichheit ; Arbeitsmarkt ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Autor, David H. ; Dorn, David
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/69462
• Last update: 10.03.2025, 11:45 AM CET