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ROUTINIZATION‐BIASED TECHNICAL CHANGE AND GLOBALIZATION: UNDERSTANDING LABOR MARKET POLARIZATION
Author(s) -
JUNG JAEWON,
MERCENIER JEAN
Publication year - 2014
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12108
Subject(s) - economics , outsourcing , globalization , multinational corporation , technical change , labour economics , polarization (electrochemistry) , technological change , labor demand , offshoring , microeconomics , neoclassical economics , market economy , wage , macroeconomics , productivity , business , chemistry , finance , marketing
There is now ample evidence that jobs and wages have been polarizing at the extremes of the skill distribution since the early 1990s. Possible explanations include, among others, routinization‐biased technical change (technical progress substituting more easily for labor in performing routine rather than nonroutine tasks) and globalization (more specifically, offshore outsourcing by multinational firms). In this article, we develop a unified theoretical general equilibrium model and examine the implications of each competing hypotheses for labor market polarization . ( JEL J21, J23, J24, F66)