Large American cities are experiencing labor market polarization, characterized by a simultaneous increase in the employment share of both high-skilled and low-skilled jobs. Economists Fabio Cerina, Elisa Dienesch, Alessio Moro, and Michelle Rendal propose that this phenomenon can be attributed to technology shocks that enhance the productivity of highly skilled workers. As these skilled workers increase their participation in the labor market, they also intensify their consumption of personal services, thus generating greater demand for low-skilled jobs.
March 28th 2024
