Labor Market Polarization in Britain and Germany
On November 7, 2017, Tuesday at 4:15 pm in Pettengill G65, “Labor Market Polarization in Britain and Germany: A Cross-National Comparison Using Longitudinal Household Data” was presented by Xiupeng Wang, PhD Candidate from the University of Connecticut.
Abstract: Since the 1980s, the share of the employment for mid-wage occupations decreased while the wages in these sections delined relative to the top and the bottom of the distribution. Such polarized pattern has been studied in many industrialized countries including Britain and Germany. As the result of the technology advanced during this period, machines and computers have been largely applied to production and can substitute for workers in occupations with a high content of routine tasks. Such phenomenon is phrased as Routine-biased Technical Change (RBTC). This paper takes the advantage of panel data to provide the insight of individual-level unobservable abilities and shows the strong evidence of the correlation between ability and occupational mobility. Among the routine workers, those with higher skills are positively related to switching to higher paid non-routine cognitive occupations, while those with lower skills are more likely to switch to lower paid non-cognitive manual occupations. And such occupational mobility resulted in a faster future wage growth for the switchers on both directions, relative to those stayed in the routine occupations.
Sponsored by The Casey Lecture Fund for Economics.