Technical Change, Heterogeneity in Skill Demand, and Employment Polarization

Sung-min Kim ; Jin-tae Hwang

Research Fellow, Korea Insurance Research Institute, 35-4, Yoido-dong, Youngdeungpo-gu, Seoul 150-600, Korea, Tel: 02-3775-9024 jt0813@kiri.or.kr
Part-time Lecturer, Department of Economics, Korea University, 145, Anam-ro, Seongbuk-gu, Seoul 136-701, Korea, Tel: 02-3290-2200 sm0910@korea.ac.kr

JEL Classification: J21, J24, O30

Abstract

We explore how the rapid adoption of computer-related assets affects the recent polarization of employment in the U.S. labor market, which is inconsistent with the skill-biased technological change hypothesis. Similar to Goos and Manning (2007), we show that the job polarization could be explained by the routinization hypothesis of Autor, Levy, and Murnane (2003). Our empirical analyses confirm that the newly adopted computer-related capitals change the demands for three types of skilled workers heterogeneously, leading to a polarization in employment structure.

Keywords:

Computerization, Skill Demand, Polarization

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