Labor market polarization, the decline of routine work, and technological change: A quantitative analysis

Journal of Monetary Economics, 2020, vol. 110, issue C, 62-80

Abstract: A common hypothesis for labor market polarization is that technological progress has decreased the price of machines which are substitutable with middle skilled jobs and complementary to higher and lower skilled jobs. I quantitatively evaluate this hypothesis in a dynamic general equilibrium model. I find that the near constant elasticities of labor demand in the standard technology hypothesis and the observed dynamics of the price of machines are inconsistent with rapid polarization pre-2000 and its slower dynamics thereafter. Extending the model to allow for a separate investment sector requiring only high skilled workers generates a much closer fit to data.

Keywords: Job polarization; Investment specific technological change; Occupational tasks; Occupational choice (search for similar items in EconPapers)
JEL-codes: E24 J24 O33 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393219300042
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:110:y:2020:i:c:p:62-80

DOI: 10.1016/j.jmoneco.2019.01.004

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().