Job polarization and the declining quality of knowledge workers: evidence from the UK and Germany

Chiara Cavaglia and Ben Etheridge

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Across the developed world, employment has polarized clearly by occupation, but changes to the wage structure have been harder to interpret. We examine changes to the wage structure in the UK and Germany, two countries with apparently very different trends. Using panel data, we argue that changes to quality-adjusted prices for occupations grouped by predominant tasks correlate strongly with employment growth in both countries, consistently with task-based changes to labour demand. The gap between price and average wage changes is strongest in top (knowledge) jobs, implying that the average quality of these workers has declined over time. We obtain further direct evidence on changes to worker quality using rich data on individual characteristics.

Keywords: Cognitive ability; Height; Job polarization; Roy model; Task prices (search for similar items in EconPapers)
JEL-codes: J20 J24 J31 (search for similar items in EconPapers)
Date: 2020-10-01
New Economics Papers: this item is included in nep-his
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Citations: View citations in EconPapers (9)

Published in Labour Economics, 1, October, 2020, 66. ISSN: 0927-5371

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:105819

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