Thursday, April 23, 2015

23/4/15: Skills and Employment: 1950-2010 Data


A very interesting study, titled "Labor Market Polarization Over the Business Cycle" by
Christopher L. Foote and Richard W. Ryan (http://www.bostonfed.org/economic/wp/wp2014/wp1416.pdf) from the Boston Fed postulates that "Job losses during the Great Recession were concentrated among middle-skill workers, the same group that over the long run has suffered the most from automation and international trade." This is what is known as occupational polarisation - the disappearance of mid-range skills and low-end skills jobs and growth in higher skilled occupations.

The study finds "that middle-skill occupations have traditionally been more cyclical than
other occupations, in part because of the volatile industries that tend to employ middle-skill workers. Unemployed middle-skill workers also appear to have few attractive or feasible employment alternatives outside of their skill class, and the drop in male participation rates during the past several decades can be explained in part by an erosion of middle-skill job opportunities."

One hell of a chart illustrating the above across longer time horizon:

Shares of Employment for Four Occupational Groups:


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