Labor market polarization over the business cycle

Christopher Foote and Richard W. Ryan

No 14-16, Working Papers from Federal Reserve Bank of Boston

Abstract: One of the most important long-run trends in the U.S. labor market is polarization, defined as the relative growth of employment in high-skill jobs (such as management and technical positions) and low-skill jobs (such as food-service and janitorial work) amid the concurrent decline in middle-skill jobs (such as clerical, construction, manufacturing, and retail occupations). Middle-skill job losses typically result from outsourcing labor to lower-wage countries or from substituting automated technologies for routine tasks. Economists are now beginning to study how long-run polarization might be related to short-run business cycles, but doing so requires the construction of quarterly datasets with consistent occupational data over long periods of time. The authors of this paper construct a new dataset of occupational employment and unemployment that extends from 1947:Q3 to 2013:Q4. Using this dataset, along with more-recent individual-level data from the Current Population Survey, the authors study how recessions typically affect employment in various occupations, what employment alternatives are available to middle-skill workers who become unemployed, and whether the ongoing erosion of middle-skill job opportunities is related to long-term declines in labor force participation among men.

JEL-codes: E24 J22 J23 J24 J62 J63 J64 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2014-12-26
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Labor Market Polarization Over the Business Cycle (2015)
Chapter: Labor-Market Polarization over the Business Cycle (2014)
Working Paper: Labor-market polarization over the business cycle (2012)
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