Job polarization in European industries

• Author: Valeria CIRILLO
• DOI: http://doi.org/10.1111/ilr.12033
• Date: 01 March 2018
• Published date: 01 March 2018

International Labour Review, Vol. 157 (2018), No. 1

Copyright © The author 2018

Journal compilation © International Labour Organization 2018

* National Institute for the Analysis of Public Policies (INAPP), Rome, email: v.cirillo@

inapp.org.

Responsibility for opinions expressed in signed articles rests solely with their authors, and

publication does not constitute an endorsement by the ILO.

Job polarization in European industries

Valeria CIRILLO*

Abstract. Job polarization instead of pure upgrading is emerging in European

industries. This article focuses on polarization of the employment structure and

contributes empirical evidence to explain patterns of occupational change in re-

lation to four major groups: managers, clerks, craft workers and manual workers.

Building on the structural approach, the author aims to analyse employment dy-

namics at the sectoral level and shed light on job polarization trends in Europe.

Job polarization clearly emerges, mainly in service sectors, and in some European

countries it is leading to a rejection of the hypothesis of skill upgrading sustained

by the skill-biased technical change paradigm.

Over the last decade a tendency towards job polarization has challenged

the vision of an ongoing process of occupational upgrading in Europe.

European employment structures, even though they aren’t uniformly shaped,

are tending to converge towards polarization as a consequence of post-Ford-

ism, in a process characterized by dysfunctionality in terms of capital accumu-

lation and underconsumptionism (Marx, 1981; Vidal, 2013). Within a context of

declining prots, intensied competition and nancialization, changes in em-

ployment relationships are placing downward pressure on income and labour

share. Consequently, both the internationalization of production and the rise

of the shareholder value model (Lazonick and O’Sullivan, 2000) are leading

to new employment relationships based on reduced employment security and

on a shift from unionization towards market-determined wages (Vidal, 2013).

Along this line, polarized job growth reects the post-Fordism stage of capital

accumulation, characterized by the growth of both low-paid/low-skilled jobs

and high-paid/high-skilled jobs (Wright and Dwyer, 2003, for the United States;

Goos and Manning, 2007, for the United Kingdom; Goos, Manning and Salo-

mons, 2011, for the United Kingdom and Germany). We are therefore witness-

ing a return of the concerns in social sciences regarding work organization and

the skill distribution as a consequence of economic change.

International Labour Review40

Gallie (1991) underscored the existence of three main patterns of skill

change – upskilling, deskilling and polarization. While upskilling postulates a

positive association between technological development and complex types of

work tasks and skills, the deskilling hypothesis argues that there is a tendency

towards a decline in the real skill content of jobs (Crompton, 2010). Accord-

ing to this latter hypothesis, the growth in non-manual occupations is indeed

accompanied by a transformation of the character of those occupations and

by a decline in the quality of work due to a low level of employee discretion

and a lower capacity of employees to resist the substitutability of labour. Fi-

nally, job polarization seems to combine elements from both streams of litera-

ture, therefore suggesting a polarization of the workforce between those who

benet from economic change and those who are trapped in low-skilled and

disadvantaged forms of employment (Gallie, 1991, p. 320).

There are two main explanations for the forces driving job polarization.

First, dual labour market theory states the coexistence of a primary labour

market for higher-skilled workers, composed of large rms in near monop-

olistic product market situations, and a secondary labour market, subject to

deskilling and direct supervisory control and dominated by smaller companies

in competitive market situations (Edwards, 1979). The second main explan-

ation refers to rm heterogeneity in terms of required technologies and skills

(Doeringer and Piore, 1971). And there is also a third explanation for the ten-

dency towards job polarization, an explanation based on a structural change

of the economy resulting in a shift from manufacturing-based to service-based.

Consequently, there is movement from the manufacturing sector, character-

ized by full-time employment and a high level of unionization, towards ser-

vices, characterized by part-time, low-quality employment.

In contrast to upskilling and deskilling scenarios, a tendency towards job

polarization has been detected in the data from both Europe and the United

States. There are also major differences between European countries, where

not only do divergent occupational patterns coexist (Fernández-Macías, 2012),

there are also differences according to the particular occupational classica-

tion that is applied (Anderson, 2009). Among sociologists, Kalleberg (2011)

underscores how the labour force has become increasingly polarized between

workers with more education and more marketable skills and workers with-

out human capital attributes (pp. 14–15). Kalleberg also draws attention to the

unprecedented growth of economic dualism and the polarization of job struc-

tures, thereby reecting social polarization and the rise of an underclass (Jor-

dan and Redley, 1994). From an empirical point of view, economists have been

more engaged in documenting polarization according to the data, and among

such economists, Dustmann and Pereira (2008) nd evidence of increasing po-

larization in Germany; Machin (2011) nds evidence for the United Kingdom;

Centeno and Novo (2009) nd it for Portugal; and Michaels, Natraj and Van

Reenen (2010) nd it for Europe using EU KLEMS aggregate data.

Even though empirical literature has often recognized a trend towards

polarization in both employment and wages, the explanations for that trend