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Long-run patterns of labour market polarisation: Evidence from German micro data

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  • Bachmann, Ronald
  • Cim, Merve
  • Green, Colin

Abstract

The past four decades have witnessed dramatic changes in the structure of employment. In particular, the rapid increase in computational power has led to large-scale reductions in employment in jobs that can be described as intensive in routine tasks. These jobs have been shown to be concentrated in middle skill occupations. A large literature on labour market polarisation characterises and measures these processes at an aggregate level. However to date there is little information regarding the individual worker adjustment processes related to routine-biased technological change. Using an administrative panel data set for Germany, we follow workers over an extended period of time and provide evidence of both the short-term adjustment process and medium-run effects of routine task intensive job loss at an individual level. We initially demonstrate a marked, and steady, shift in employment away from routine, middle-skill, occupations. In subsequent analysis, we demonstrate how exposure to jobs with higher routine task content is associated with a reduced likelihood of being in employment in both the short term (after one year) and medium term (five years). This employment penalty to routineness of work has increased over the past four decades. More generally, we demonstrate that routine task work is associated with reduced job stability and more likelihood of experiencing periods of unemployment. However, these negative effects of routine work appear to be concentrated in increased employment to employment, and employment to unemployment transitions rather than longer periods of unemployment.

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  • Bachmann, Ronald & Cim, Merve & Green, Colin, 2018. "Long-run patterns of labour market polarisation: Evidence from German micro data," DICE Discussion Papers 292, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  • Handle: RePEc:zbw:dicedp:292
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    Cited by:

    1. Per-Anders Edin & Tiernan Evans & Georg Graetz & Sofia Hernnäs & Guy Michaels, 2023. "Individual Consequences of Occupational Decline," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2178-2209.
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    3. Arntz, Melanie & Ivanov, Boris & Pohlan, Laura, 2022. "Regional Structural Change and the Effects of Job Loss," IAB-Discussion Paper 202217, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Zeyer-Gliozzo, Birgit, 2020. "Returns to formal, non-formal and informal training for workers at risk of automation," Ruhr Economic Papers 857, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Bachmann, Ronald & Demir, Gökay & Green, Colin P. & Uhlendorff, Arne, 2022. "The Role of Within-Occupation Task Changes in Wage Development," IZA Discussion Papers 15647, Institute of Labor Economics (IZA).
    6. Eduard Storm, 2022. "Task specialization and the Native‐Foreign Wage Gap," LABOUR, CEIS, vol. 36(2), pages 167-195, June.
    7. Bachmann, Ronald & Gonschor, Myrielle, 2022. "Technological progress, occupational structure and gender gaps in the German labour market," Ruhr Economic Papers 955, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. Ronald Bachmann & Peggy Bechara & Christina Vonnahme, 2020. "Occupational Mobility in Europe: Extent, Determinants and Consequences," De Economist, Springer, vol. 168(1), pages 79-108, March.
    9. Blien, Uwe & Dauth, Wolfgang & Roth, Duncan H.W., 2021. "Occupational routine intensity and the costs of job loss: evidence from mass layoffs," Labour Economics, Elsevier, vol. 68(C).
    10. Brand, Claus & Obstbaum, Meri & Coenen, Günter & Sondermann, David & Lydon, Reamonn & Ajevskis, Viktors & Hammermann, Felix & Angino, Siria & Hernborg, Nils & Basso, Henrique & Hertweck, Matthias & Bi, 2021. "Employment and the conduct of monetary policy in the euro area," Occasional Paper Series 275, European Central Bank.
    11. Bachmann, Ronald & Stepanyan, Gayane, 2020. "It's a woman's world? Occupational structure and the rise of female employment in Germany," Ruhr Economic Papers 889, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Ronald Bachmann & Gökay Demir & Hanna Frings, 2022. "Labor Market Polarization, Job Tasks, and Monopsony Power," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 11-49.
    13. Tamm, Marcus, 2018. "Training and changes in job Tasks," Economics of Education Review, Elsevier, vol. 67(C), pages 137-147.
    14. Hedieh Aghelmaleki & Ronald Bachmann & Joel Stiebale, 2022. "The China Shock, Employment Protection, and European Jobs," ILR Review, Cornell University, ILR School, vol. 75(5), pages 1269-1293, October.
    15. Nicola Cassandro & Marco Centra & Dario Guarascio & Piero Esposito, 2021. "What drives employment–unemployment transitions? Evidence from Italian task-based data," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 1109-1147, October.
    16. Genz, Sabrina & Schnabel, Claus, 2021. "Digging into the digital divide: Workers' exposure to digitalization and its consequences for individual employment," Discussion Papers 118, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    17. Alic Bîrcă & Christiana Brigitte Sandu & Igor Matveiciuc, 2023. "Determinants of Public Institutions Competitiveness: Case Study of the Republic of Moldova," Administrative Sciences, MDPI, vol. 13(10), pages 1-25, September.
    18. Neumann, Uwe, 2020. "Lebenslanges Lernen als Standortfaktor? Weiterbildungschancen im Vergleich der deutschen Bundesländer," RWI Materialien 138, RWI - Leibniz-Institut für Wirtschaftsforschung.
    19. Delaporte, Isaure & Peña, Werner, 2023. "The Dynamics of Labour Market Polarization in Chile: An Analysis of the Link Between Technical Change and Informality," GLO Discussion Paper Series 1262, Global Labor Organization (GLO).
    20. Jasmine Mondolo, 2022. "The composite link between technological change and employment: A survey of the literature," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1027-1068, September.
    21. Helfen, Markus & Wirth, Carsten, 2020. "Management von Arbeit in pluralen Netzwerkorganisationen: Trends, Deutungen und Handlungsoptionen," Working Paper Forschungsförderung 185, Hans-Böckler-Stiftung, Düsseldorf.
    22. Wacks, Johannes, 2021. "Labor Market Polarization with Hand-to-Mouth Households," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242391, Verein für Socialpolitik / German Economic Association.
    23. Bachmann, Ronald & Gonschor, Myrielle & Storm, Eduard & Evans, Julian, 2024. "Berufe der Zukunft im Ruhrgebiet: Studie im Auftrag des Regionalverbands Ruhr. Endbericht," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 296884.
    24. Neumann, Uwe & Schaffner, Sandra & Eilers, Lea, 2019. "Bedeutung finanzieller Grundkompetenzen aus regionaler Perspektive. Gefördert durch die Dr. Josef und Brigitte Pauli-Stiftung," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 222358.

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    More about this item

    Keywords

    polarization; occupational mobility; worker flows; tasks;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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