The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market

David Autor and David Dorn

No 7068, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.

Keywords: job tasks; inequality; service occupations; technological change; polarization; skill demand; occupational choice (search for similar items in EconPapers)
JEL-codes: E24 J24 J31 J62 O33 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2012-12
New Economics Papers: this item is included in nep-lab, nep-lma, nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Published - published in: American Economic Review, 2013, 103 (5), 1553-1597

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Related works:
Journal Article: The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market (2013)
Working Paper: The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market (2009)
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