Technical Change, Heterogeneity in Skill Demand, and Employment Polarization

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 hypothesisof 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.