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Job Polarization and the Declining Fortunes of the Young: Evidence from the United Kingdom
Author:
Ms. Era Dabla-Norris
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Carlo Pizzinellinull

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Jay Rappaportnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2019: Issue 216
Language:
English
Publication Date:
11 Oct 2019
DOI:
https://doi.org/10.5089/9781513515410.001
ISBN:
9781513515410
ISSN:
1018-5941
Pages:
55
Keywords:
WP; wage differential; age group; cohort effect; wage growth; Job polarization; Occupational choice; Inter-generational inequality; worker group; aggregate wage slump; lifetime earnings; wage slowdown; wage regression; stagnating wage; wage stagnation; employment share; wages clerk; Wages; Employment; Labor markets; Labor force; Women
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper uses a life-cycle framework to document new stylized facts about the nexus between job polarization and earnings inequality. Using quarterly labor force data for the UK over the period 2000-2018, we find clear life-cycle profiles in the probability of being employed within each occupation type and wages earned therein. Cohort plots and econometric analysis suggest that labor market outcomes and prospects have gradually worsened for the young. These adverse trends are particularly significant for low-skill women: estimated cohort effects point to a fall in wages within each occupation as well as a lower propensity of being employed in abstract-task occupations. We also find evidence of general occupational downgrading in the UK, with more educated workers taking up fewer high-skill occupations than they did in the past. Our analysis informs the policy debate over appropriate measures needed to reduce skill mismatches and alleviate labor market transitions.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2019: Issue 216