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Ms. Era Dabla-Norris, Carlo Pizzinelli, and Jay Rappaport
This paper uses a life-cycle framework to document new stylized facts about the nexus between job polarization and earnings inequality. Using quarterly labor force data for the UK over the period 2000-2018, we find clear life-cycle profiles in the probability of being employed within each occupation type and wages earned therein. Cohort plots and econometric analysis suggest that labor market outcomes and prospects have gradually worsened for the young. These adverse trends are particularly significant for low-skill women: estimated cohort effects point to a fall in wages within each occupation as well as a lower propensity of being employed in abstract-task occupations. We also find evidence of general occupational downgrading in the UK, with more educated workers taking up fewer high-skill occupations than they did in the past. Our analysis informs the policy debate over appropriate measures needed to reduce skill mismatches and alleviate labor market transitions.
Ms. Era Dabla-Norris, Carlo Pizzinelli, and Jay Rappaport

( Autor and Dorn, 2013 ). The declining share of employment in routine jobs and growing wage polarization are also associated with higher earnings inequality ( Acemoglu and Autor, 2011 ). Who is the loss of routine job opportunities affecting most acutely? Are young workers worse off than older generations? Across cohorts, is this driven by differences in the composition and propensity of specific demographic groups to work in routine and other jobs? This paper uses a life-cycle framework to examine the nexus between job polarization and earnings inequality in the

Ms. Era Dabla-Norris, Carlo Pizzinelli, and Jay Rappaport
Labor markets in the UK have been characterized by markedly widening wage inequality for lowskill (non-college) women, a trend that predates the pandemic. We examine the contribution of job polarization to this trend by estimating age, period, and cohort effects for the likelihood of employment in different occupations and the wages earned therein over 2001-2019. For recent generations of women, cohort effects indicate a higher likelihood of employment in low-paying manual jobs relative to high-paying abstract jobs. However, cohort effects also underpin falling wages for post-1980 cohorts across all occupations. We find that falling returns to labor rather than job polarization has been a key driver of rising inter-age wage inequality among low-skill females. Wage-level cohort effects underpin a nearly 10 percent fall in expected lifetime earnings for low-skill women born in 1990 relative to those born in 1970.
Ms. Era Dabla-Norris, Carlo Pizzinelli, and Jay Rappaport

percent) of the four groups. Notably, the widening of the gap predates the 2008 Great Recession. Moreover, Figure 1b ) shows that the rising premium originated primarily from a persistent decline in the average hourly wage of the young since the mid-2000s, while the average wages of prime-age and “old” workers (aged 50–64) continued to rise and recovered from the Great Recession. 2 In line with the long-term aggregate “job polarization” trends identified by Goos and Manning (2007) , the period 2001–2019 also featured large occupational shifts for non-college women