Where Have the Middle-Wage Workers Gone? A Study of Polarization Using Panel Data

Guido Matias Cortes

Journal of Labor Economics, 2016, vol. 34, issue 1, 63 - 105

Abstract: This paper presents a theoretical and empirical analysis of the effects of routine-biased technical change on occupational transition patterns and wage changes of individual workers using a general equilibrium model with endogenous sorting of workers into occupations. Consistent with the predictions of the model, data from the Panel Study of Income Dynamics show strong evidence of selection on ability in the occupational mobility patterns of routine workers, a significant fall in the wage premium in routine occupations, and faster wage growth over long-run horizons for workers switching out of routine jobs relative to those who stay.

Date: 2016
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Working Paper: Where Have the Routine Workers Gone? A Study of Polarization Using Panel Data (2012)
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