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Job polarization in advanced and emerging countries: The role of task relocation and technological change within global supply chains

This paper documents that job polarization – the simultaneous expansion of high and low-wage occupations at the expense of middle-wage occupations – is pervasive in the non-agricultural workforce of advanced and emerging countries over the period from 1999 to 2007. To investigate what is driving these labour market developments, we develop a task-based model of production in global supply chains and propose a decomposition of changes in occupational labour demand within these chains. Using a new harmonized cross-country occupations database combined with world input-output tables, we find technological change drives job polarization in almost all countries. Cross-border task relocation contributes towards polarizing labour markets in advanced countries, while the opposite pattern is observed in offshore destination countries.