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The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market

Autor, Dorn

2009NBER Working Paper96 citations

Observational labor marketCausalTheoretical model

Automation / RobotsOccupational mobilityRoutine task changeAugmentation vs. substitutionGeneral automation

Abstract

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.

Summary

Autor and Dorn develop a spatial equilibrium model where computerization substitutes for routine tasks and complement abstract tasks, and test predictions using commuting zone-level data from 1950-2005 to explain employment and wage polarization in the US labor market.

Main Finding

Commuting zones with higher routine employment shares in 1980 experienced larger adoption of computers, greater reallocation of non-college workers into service occupations (employment polarization), larger wage gains at both tails of the skill distribution (wage polarization), and larger inflows of high and low skill workers between 1980-2005.

Primary Datasets

CPS

Labor outcomes

ACS

Labor outcomes

Census IPUMS; ACS; CPS

Secondary Datasets

DOT task measures

Key Methods: Spatial equilibrium model; shift-share IV using 1950 industry mix; commuting zone-level difference-in-differences; reduced form wage regressions with CZ-occupation fixed effects
Sample Period: 1980-2005
Geographic Coverage: US
Sample Size: 722 commuting zones observed over 5 Census waves; individual-level wage regressions use 5.4 million worker observations from 1980 Census and 2005 ACS
Level of Analysis: Region, Occupation, Individual
Occupation Classification: Census occupation codes
Industry Classification: None

Notes

This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization. [Claude classification]: This is the seminal Autor-Dorn (2009) NBER working paper (revised 2012) on job polarization. The paper combines theoretical modeling with reduced form empirical analysis. The shift-share IV uses 1950 industry structure interacted with national occupation composition to instrument for local routine employment shares. The causal identification comes from the IV strategy combined with stacked first-differences and spatial variation across commuting zones. While the paper includes extensive descriptive statistics, it makes explicit causal claims about the effects of routine task intensity on employment and wage polarization.