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The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market

Year: 2013

Type: article

Abstract: We offer a unified analysis of the growth of low-skill service occupations between 1980 and 2005 and the concurrent polarization of US employment and wages. We hypothesize that polarization stems from 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 corroborate four implications of this hypothesis. Local labor markets that specialized in routine tasks 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. (JEL J24, J31, R23)

Source: American Economic Review

DOI: 10.1257/aer.103.5.1553

Authors: David H Autor, David Dorn

Institutions: University of Zurich, Centro de Estudios Monetarios y Financieros, Massachusetts Institute of Technology

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: green

OpenAlex ID: W3124401164

FWCI: 330

Cites: 77

Cited by: 3,824

Related to: 10