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Title: The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market

Citation Type: Working Paper

Publication Year: 2009

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Abstract: We offer a unified explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.

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Authors: Autor, David H.; Dorn, David

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Publication Number: 15150

Institution: National Bureau of Economic Research

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Data Collections: IPUMS USA, IPUMS CPS

Topics: Labor Force and Occupational Structure

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