IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2019-216.html
   My bibliography  Save this paper

Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom

Author

Listed:
  • Ms. Era Dabla-Norris
  • Carlo Pizzinelli
  • Jay Rappaport

Abstract

This paper uses a life-cycle framework to document new stylized facts about the nexus between job polarization and earnings inequality. Using quarterly labor force data for the UK over the period 2000-2018, we find clear life-cycle profiles in the probability of being employed within each occupation type and wages earned therein. Cohort plots and econometric analysis suggest that labor market outcomes and prospects have gradually worsened for the young. These adverse trends are particularly significant for low-skill women: estimated cohort effects point to a fall in wages within each occupation as well as a lower propensity of being employed in abstract-task occupations. We also find evidence of general occupational downgrading in the UK, with more educated workers taking up fewer high-skill occupations than they did in the past. Our analysis informs the policy debate over appropriate measures needed to reduce skill mismatches and alleviate labor market transitions.

Suggested Citation

  • Ms. Era Dabla-Norris & Carlo Pizzinelli & Jay Rappaport, 2019. "Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom," IMF Working Papers 2019/216, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2019/216
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=48644
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. L. Rachel Ngai & Barbara Petrongolo, 2017. "Gender Gaps and the Rise of the Service Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(4), pages 1-44, October.
    2. Nir Jaimovich & Henry E. Siu, 2020. "Job Polarization and Jobless Recoveries," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 129-147, March.
    3. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 35-78.
    4. Fernández-Kranz, Daniel & Rodríguez-Planas, Núria, 2011. "The part-time pay penalty in a segmented labor market," Labour Economics, Elsevier, vol. 18(5), pages 591-606, October.
    5. Bhalotra, Sonia & Fernandez Sierra, Manuel, 2018. "The distribution of the gender wage gap," ISER Working Paper Series 2018-10, Institute for Social and Economic Research.
    6. Paul Gregg & Stephen Machin & Mariña Fernández‐Salgado, 2014. "Real Wages and Unemployment in the Big Squeeze," Economic Journal, Royal Economic Society, vol. 0(576), pages 408-432, May.
    7. Goldin, Claudia, 2006. "The Quiet Revolution That Transformed Women’s Employment, Education, and Family," Scholarly Articles 2943933, Harvard University Department of Economics.
    8. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    9. Sewon Hur, 2018. "The Lost Generation of the Great Recession," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 179-202, October.
    10. Bell, David N.F. & Blanchflower, David G., 2018. "Underemployment and the Lack of Wage Pressure in the UK," National Institute Economic Review, National Institute of Economic and Social Research, vol. 243, pages 53-61, February.
    11. Michael W. L. Elsby & Bart Hobijn & Aysegul Sahin, 2010. "The Labor Market in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 1-69.
    12. Patterson, Christina & Şahin, Ayşegül & Topa, Giorgio & Violante, Giovanni L., 2016. "Working hard in the wrong place: A mismatch-based explanation to the UK productivity puzzle," European Economic Review, Elsevier, vol. 84(C), pages 42-56.
    13. Orazio P. Attanasio, 1998. "Cohort Analysis of Saving Behavior by U.S. Households," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 575-609.
    14. Mariya Brussevich & Era Dabla-Norris & Christine Kamunge & Pooja Karnane & Salma Khalid & Kalpana Kochhar, 2018. "Gender, Technology, and the Future of Work," IMF Staff Discussion Notes 18/07, International Monetary Fund.
    15. João Paulo Pessoa & John Van Reenen, 2014. "The UK Productivity and Jobs Puzzle: Does the Answer Lie in Wage Flexibility?," Economic Journal, Royal Economic Society, vol. 0(576), pages 433-452, May.
    16. Garibaldi, Pietro & Boeri, Tito & Moen, Espen R., 2016. "A clash of generations? Increase in Retirement Age and Labor Demand for Youth," CEPR Discussion Papers 11422, C.E.P.R. Discussion Papers.
    17. Philip Oreopoulos & Till von Wachter & Andrew Heisz, 2012. "The Short- and Long-Term Career Effects of Graduating in a Recession," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 1-29, January.
    18. Salvatori, Andrea, 2018. "The anatomy of job polarisation in the UK," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages 1-8.
    19. Cortes, Guido Matias & Jaimovich, Nir & Siu, Henry E., 2017. "Disappearing routine jobs: Who, how, and why?," Journal of Monetary Economics, Elsevier, vol. 91(C), pages 69-87.
    20. Paul Beaudry & David A. Green & Benjamin M. Sand, 2014. "The Declining Fortunes of the Young since 2000," American Economic Review, American Economic Association, vol. 104(5), pages 381-386, May.
    21. Turrell, Arthur & Speigner, Bradley & Djumalieva, Jyldyz & Copple, David & Thurgood, James, 2018. "Using job vacancies to understand the effects of labour market mismatch on UK output and productivity," Bank of England working papers 737, Bank of England.
    22. Hector Espinoza & Stefan Speckesser, 2019. "A comparison of earnings related to higher level vocational/technical and academic education," CVER Research Papers 019, Centre for Vocational Education Research.
    23. Claudia Goldin, 2006. "The Quiet Revolution That Transformed Women's Employment, Education, and Family," American Economic Review, American Economic Association, vol. 96(2), pages 1-21, May.
    24. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    25. Richard Blundell & Claire Crawford & Wenchao Jin, 2014. "What Can Wages and Employment Tell Us about the UK's Productivity Puzzle?," Economic Journal, Royal Economic Society, vol. 0(576), pages 377-407, May.
    26. Tingyun Chen & Jean-Jacques Hallaert & Alexander Pitt & Haonan Qu & Maximilien Queyranne & Alaina Rhee & Anna Shabunina & Jérôme Vandenbussche & Irene Yackovlev, 2018. "Inequality and Poverty across Generations in the European Union," IMF Staff Discussion Notes 18/01, International Monetary Fund.
    27. Daniel Schaefer & Carl Singleton, 2017. "Real Wages and Hours in the Great Recession: Evidence from Firms and their Entry-Level Jobs," CESifo Working Paper Series 6766, CESifo.
    28. Montresor, Giulia, 2019. "Job polarization and labour supply changes in the UK," Labour Economics, Elsevier, vol. 58(C), pages 187-203.
    29. Bussolo,Maurizio & Torre,Ivan & Winkler,Hernan Jorge, 2018. "Does Job Polarization Explain the Rise in Earnings Inequality ? Evidence from Europe," Policy Research Working Paper Series 8652, The World Bank.
    30. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
    31. Hector Espinoza & Stefan Speckesser, 2019. "A Comparison of Earnings Related to Higher Level Vocational/Technical and Academic Education," National Institute of Economic and Social Research (NIESR) Discussion Papers 502, National Institute of Economic and Social Research.
    32. Tingyun Chen & Mr. Jean-Jacques Hallaert & Mr. Alexander Pitt & Mr. Haonan Qu & Mr. Maximilien Queyranne & Ms. Alaina P Rhee & Ms. Anna Shabunina & Mr. Jerome Vandenbussche & Irene Yackovlev, 2018. "Inequality and Poverty across Generations in the European Union," IMF Staff Discussion Notes 2018/001, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meredith M. Paker, 2020. "The Jobless Recovery After the 1980-1981 UK Recession," Oxford Economic and Social History Working Papers _182, University of Oxford, Department of Economics.
    2. Hennig, Jan-Luca, 2021. "Labor Market Polarization and Intergenerational Mobility: Theory and Evidence," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242353, Verein für Socialpolitik / German Economic Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bhalotra, Sonia & Fernandez Sierra, Manuel, 2018. "The distribution of the gender wage gap," ISER Working Paper Series 2018-10, Institute for Social and Economic Research.
    2. Paul Beaudry & David A. Green & Benjamin M. Sand, 2016. "The Great Reversal in the Demand for Skill and Cognitive Tasks," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 199-247.
    3. David J. Deming, 2017. "The Growing Importance of Social Skills in the Labor Market," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1593-1640.
    4. Ariell Reshef, 2013. "Is Technological Change Biased Towards the Unskilled in Services? An Empirical Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(2), pages 312-331, April.
    5. Fabio Cerina & Alessio Moro & Michelle Rendall, 2021. "The Role Of Gender In Employment Polarization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(4), pages 1655-1691, November.
    6. Eisenbarth, Anthony & Chen, Zhou Fu, 2022. "The evolution of wage inequality within local U.S. labor markets," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 56, pages 1-2.
    7. Congressional Budget Office, 2018. "CBO’s Projection of Labor Force Participation Rates: Working Paper 2018-04," Working Papers 53616, Congressional Budget Office.
    8. Bhalotra, Sonia R & Fernández, Manuel & Wang, Fan, 2022. "The distribution of the gender wage gap : An equilibrium model," CAGE Online Working Paper Series 614, Competitive Advantage in the Global Economy (CAGE).
    9. David Hémous & Morten Olsen, 2022. "The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(1), pages 179-223, January.
    10. Davide Consoli & Francesco Vona & Francesco Rentocchini, 2016. "That was then, this is now: skills and routinization in the 2000s," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(5), pages 847-866.
    11. Nikolaos Terzidis & Raquel Ortega‐Argilés, 2021. "Employment polarization in regional labor markets: Evidence from the Netherlands," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 971-1001, November.
    12. repec:hal:spmain:info:hdl:2441/2ajduu0gqt9ho8h2tavbin6ops is not listed on IDEAS
    13. Antonio Martins-Neto & Nanditha Mathew & Pierre Mohnen & Tania Treibich, 2024. "Is There Job Polarization in Developing Economies? A Review and Outlook," The World Bank Research Observer, World Bank, vol. 39(2), pages 259-288.
    14. Zuazu-Bermejo, Izaskun, 2022. "Robots and women in manufacturing employment," ifso working paper series 19, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    15. Brad Hershbein & Lisa B. Kahn, 2018. "Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings," American Economic Review, American Economic Association, vol. 108(7), pages 1737-1772, July.
    16. Orhun Sevinc, 2017. "Skill-Biased Technical Change and Labor Market Polarization: The Role of Skill Heterogeneity Within Occupations," Discussion Papers 1728, Centre for Macroeconomics (CFM).
    17. repec:spo:wpmain:info:hdl:2441/2ajduu0gqt9ho8h2tavbin6ops is not listed on IDEAS
    18. Christian Gschwendt, 2022. "Routine job dynamics in the Swiss labor market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-21, December.
    19. Maarten Goos & Melanie Arntz & Ulrich Zierahn & Terry Gregory & Stephanie Carretero Gomez & Ignacio Gonzalez Vazquez & Koen Jonkers, 2019. "The Impact of Technological Innovation on the Future of Work," JRC Working Papers on Labour, Education and Technology 2019-03, Joint Research Centre.
    20. Mario Reinhold, 2016. "On the Link between Job Polarisation and Wage Inequality - A regional approach for Germany," ERSA conference papers ersa16p361, European Regional Science Association.
    21. Du Yuhong & Wei Xiahai, 2020. "Task content routinisation, technological change and labour turnover: Evidence from China," The Economic and Labour Relations Review, , vol. 31(3), pages 324-346, September.
    22. Cortes, Guido Matias & Jaimovich, Nir & Nekarda, Christopher J. & Siu, Henry E., 2020. "The dynamics of disappearing routine jobs: A flows approach," Labour Economics, Elsevier, vol. 65(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2019/216. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.