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Does Job Polarization Explain the Rise in Earnings Inequality ? Evidence from Europe

Author

Listed:
  • Bussolo,Maurizio
  • Torre,Ivan
  • Winkler,Hernan Jorge

Abstract

Earnings inequality and job polarization have increased significantly in several countries since the early 1990s. Using data from European countries covering a 20-year period, this paper provides new evidence that the decline of middle-skilled occupations and the simultaneous increase of high- and low-skilled occupations are important factors accounting for the rise of inequality, especially at the bottom of the distribution. Job polarization accounts for a large share of the increasing inequality between the 10th and the 50th percentiles, but it explains little or none of the increasing inequality between the 50th and 90th percentiles. Other important developments during this period, such as changing wage returns, higher educational attainment, and increased female labor force participation, account for a small portion of the changes in inequality.

Suggested Citation

  • 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.
    • Handle: RePEc:wbk:wbrwps:8652
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    Citations

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    Cited by:

    1. 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.
    2. Tomas Berglund & Kristina HÃ¥kansson & Tommy Isidorsson, 2022. "Occupational change on the dualised Swedish labour market," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 918-942, May.
    3. Bussolo,Maurizio & Krolage,Carla & Makovec,Mattia & Peichl,Andreas & Stockli,Marc & Torre,Ivan & Wittneben,Christian, 2018. "Vertical and Horizontal Redistribution : The Cases of Western and Eastern Europe," Policy Research Working Paper Series 8657, The World Bank.
    4. Lo Bello, Salvatore & Sanchez Puerta, Maria Laura & Winkler, Hernan, 2019. "From Ghana to America: The Skill Content of Jobs and Economic Development," IZA Discussion Papers 12259, Institute of Labor Economics (IZA).

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