Polarization and the growth of low‐skill service jobs in Spanish local labor markets

Abstract

This paper analyzes the long‐term transformations of the occupational structure in 50 provinces of Spain with a view to ascertain the existence and assess the extent of employment polarization. The peculiar characteristics of this country, namely rigid labor markets and the relatively recent transition to democracy, make for an interesting addition to existing studies on this topic. In line with previous literature on other countries, we find a strong association between the decline of “routine” mid‐skill jobs and the expansion of low‐skill service employment as well as differential labor market outcomes by levels of formal education. Results are robust to various controls and instrumental variables that account for long‐term industry specialization. We also find a positive local multiplier effect of high‐skilled workers on the demand for nontradable service jobs.

Low‐skill jobs and routine tasks specialization: New insights from Italian provinces

“…The empirical framework developed by them tends to confirm these predictions, providing valuable evidences on the relationship between automation and job polarization in the US over the period 1980–2005. Confirming this hypothesis, Consoli and Sanchez‐Barrioluengo (2019) focus on the long‐term transformations of the occupational structure of Spanish provinces, providing evidences of a higher increase if low‐paid occupations in provinces with initial high level of routine occupations.…”

“…Focusing on the phenomenon of employment polarization, this literature documents in detail the decline of routine‐jobs and the polarization of the labour market registered during the last decades among a number of mature economies. With reference to this strand of literature, the main reference point of our analysis are Autor and Dorn (2013), Autor, Dorn, and Hanson (2015) and recent applications to French and Spanish data provided by, respectively, Charnoz and Orand (2017) and Consoli and Sanchez‐Barrioluengo (2019). In these works, local‐level employment shares variations are used in order to analyse the implications of routine‐replacing technologies for the occupational structure of employment.…”

“…More recently, the relationship between the spread of computer technology and the evolution of the employment structure has been analysed by adopting a spatial perspective, hence by taking into account the economic, social, and institutional specificities observable across different areas (Charnoz & Orand, 2017; Ciarli, Marzucchi, Salgado, & Savona, 2018; Consoli & Sanchez‐Barrioluengo, 2019; Moretti, 2013). Indeed, these contributions stress the importance of those variables characterizing the place in which the labour market is located, highlighting the fact that the very nature of the link connecting technological change, human capital and employment dynamics also depends on the characteristics of local labour markets (LLMs).…”

“…Rather than focusing on the effect of indicators of tasks‐intensity on changes in the employment shares, it focuses on over‐time variations in the employment structure across different provinces. This empirical framework, proposed by Autor and Dorn (2013), has been recently adopted to investigate the evolution of the occupational‐structure in France (Charnoz & Orand, 2017) and Spain (Consoli & Sanchez‐Barrioluengo, 2019). Comparing to previous studies, our analysis relies both on more detailed (3 digit level) classification of occupations—with respect to Consoli and Sanchez‐Barrioluengo (2019)—and on an econometric strategy that allows to infer causal relationships—with respect to Charnoz and Orand (2017).…”

An Overview of Population Projections—Methodological Concepts, International Data Availability, and Use Cases

“…Regions are therefore increasingly competing for young and well-educated workers [71] because demographic development is unevenly distributed both at the regional level and across small areas and will have an unbalanced impact on individual regional labor markets [72]. The result will be competition for highly skilled workers which-with major regional differences-is already noticeable in some sectors of the economy [73]. The need for small-area population forecasts and labor market forecasts based on them is correspondingly high.…”