The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market
We offer an integrated 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.
We thank Daron Acemoglu, Joshua Angrist, Kerwin Charles, Luis Garicano, Maarten Goos, Caroline Hoxby, Lawrence Katz, Alan Manning, Matthias Weiss, and numerous seminar participants for excellent input that improved the paper. We thank Amanda Pallais and Jessica Pan for superb research assistance, and Mark Doms and Ethan Lewis for generous assistance with data. We are deeply indebted to Rachel Ngai and Alp Simsek for assistance with the theoretical model. Autor acknowledges support from the National Science Foundation (CAREER award SES-0239538). Dorn acknowledges funding from the Swiss National Science Foundation. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-97, August. citation courtesy of