January 2011

IZA DP No. 5470: Task-Biased Changes of Employment and Remuneration: The Case of Occupations

published as 'The Dynamics of Task-biased Technological Change: The Case of Occupations' in: Brussels Economic Review, 2013, 56 (2)

Different empirical studies suggest that the structure of employment in the U.S. and Great Britain tends to polarise into "good" and "bad" jobs. We provide updated evidence that polarisation also occurred in Germany since the mid-1980s until 2008. Using representative panel data, we show that this trend corresponds to a task bias in employment changes: routine jobs have lost relative employment, especially in predominantly manual occupations. We further provide the first direct test for whether task-biased technological change affects employment and remuneration in the same direction and conclude that there is no consistent task bias in the evolution of pay rules. By contrast, compositional changes like the proportion of union members are clearly associated with long-term changes in the remuneration of occupations.