Chile

Abstract

Using decomposition methods, this chapter analyses the role of the changing nature of work in explaining changes in earning inequality and job polarization in Chile from 2000 to 2017. Changes in occupational structure confirm a displacement of workers from low-skill occupations towards jobs demanding non-routine higher skills (professionals and technicians), and jobs requiring routine manual and cognitive tasks (services and sales). Changes in occupational earnings have had an equalizing effect, with more substantial gains favouring lower-skill occupations, although without evidence of job polarization. Inequality reductions since the 2000s are explained by a fall in earnings in the top percentiles of the distribution, reallocated most noticeably around the median (2000–06) and the bottom 30 per cent (2006–17). The routine content of tasks explains an important part of changes in earnings variability, and it has contributed to improving wages. Average earnings across occupations have become less unequal over time, contributing to the overall decline in inequality.