The Polarization of the U.S. Labor Market
27 Pages Posted: 20 Apr 2006 Last revised: 26 Dec 2022
Date Written: January 2006
Abstract
This paper analyzes a marked change in the evolution of the U.S. wage structure over the past fifteen years: divergent trends in upper-tail (90/50) and lower-tail (50/10) wage inequality. We document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years (since 1980). Wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987, but it has ceased growing (and for some measures actually narrowed) since the late 1980s. Furthermore we find that occupational employment growth shifted from monotonically increasing in wages (education) in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage (education) distribution in the 1990s. We characterize these patterns as the "polarization" of the U.S. labor market, with employment polarizing into high-wage and low-wage jobs at the expense of middle-wage work. We show how a model of computerization in which computers most strongly complement the non-routine (abstract) cognitive tasks of high-wage jobs, directly substitute for the routine tasks found in many traditional middle-wage jobs, and may have little direct impact on non-routine manual tasks in relatively low-wage jobs can help explain the observed polarization of the U.S. labor market.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Trends in U.S. Wage Inequality: Re-Assessing the Revisionists
By David H. Autor, Lawrence F. Katz, ...
-
Trends in U.S. Wage Inequality: Re-Assessing the Revisionists
By David H. Autor, Lawrence F. Katz, ...
-
Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles
By David Card and John E. Dinardo
-
Rising Wage Inequality: The Role of Composition and Prices
By David H. Autor, Lawrence F. Katz, ...
-
Rising Wage Inequality: The Role of Composition and Prices
By David H. Autor, Lawrence F. Katz, ...
-
Changes in the Labor Supply Behavior of Married Women: 1980-2000
By Francine D. Blau and Lawrence M. Kahn
-
Revisiting the German Wage Structure
By Christian Dustmann, Johannes Ludsteck, ...
-
Quantile Regression Under Misspecification, with an Application to the U.S. Wage Structure
By Joshua D. Angrist, Victor Chernozhukov, ...
-
Quantile Regression Under Misspecification, with an Application to the U.S. Wage Structure
By Joshua D. Angrist, Victor Chernozhukov, ...