Job polarisation OR AND upgrading! Recent evidence from Europe

Abstract Based on recent evidence from Europe, the paper shows that polarisation and upgrading are not mutually exclusive trends, but rather, simultaneously defined recent structural changes in employment. The results show that (a) the occupational structure shows a general shift towards high-skill jobs, (b) the prevailing upgrading patterns are often accompanied by job polarisation, as the share of middle-skill jobs declines in most cases, and (c) while low-skill employment often outperforms middle-skill jobs, it has tended to decline. In addition to analysing trends for EU-27 countries with different levels of development for the latest available time periods, the article also shows that occupational upgrading patterns are rather intertwined with job polarisation and are compatible with both the Skill-Biased Technical Change (SBTC) and Routine-Biased Technical Change (RBTC) hypotheses. The employment dynamics of low-skill workers are uncertain, as they are not fully compatible with any theoretical model, thus pointing to the need for a finer understanding of changes in occupational structure, and the extent to which both polarisation and upgrading are shaping the evolution of the labour force structure under the impact of (ongoing) technological change.