April 2016 | Maarten Goos, Alan Manning, and Anna Salomons
This paper examines job polarization in 16 Western European countries from 1993 to 2010, documenting its prevalence and its within-industry and between-industry components. It develops and estimates a framework to explain job polarization using routine-biased technological change (RBTC) and offshoring. The model explains much of the total job polarization and its within-industry and between-industry components. RBTC is found to be more important than offshoring in explaining job polarization. The model decomposes changes in occupational employment shares into within-industry and between-industry components, showing that RBTC leads to a shift away from routine occupations within industries and a decrease in the demand for middling occupations, while offshoring affects the structure of employment between industries. The findings suggest that job polarization is driven by both within-industry and between-industry effects, with RBTC playing a significant role in both.This paper examines job polarization in 16 Western European countries from 1993 to 2010, documenting its prevalence and its within-industry and between-industry components. It develops and estimates a framework to explain job polarization using routine-biased technological change (RBTC) and offshoring. The model explains much of the total job polarization and its within-industry and between-industry components. RBTC is found to be more important than offshoring in explaining job polarization. The model decomposes changes in occupational employment shares into within-industry and between-industry components, showing that RBTC leads to a shift away from routine occupations within industries and a decrease in the demand for middling occupations, while offshoring affects the structure of employment between industries. The findings suggest that job polarization is driven by both within-industry and between-industry effects, with RBTC playing a significant role in both.