Applied Economics Lunch Seminar

Du 03/04/2018 de 12:30 à 13:30

Salle R1-09, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris

GODECHOT Olivier (Sciences Po)

The Great Separation. Job Polarization in Six (and more) Countries

Growing inequality comes also with growing separation between the top and the bottom. Analyses of social cohesion have documented this phenomenon mainly through the study of school and residential segregation. This increased separatism between majority group and minorities, or between upper classes and lower classes is therefore interpreted as a growing avoidance of deprived groups by privileged ones. However this process neglects a major sphere of social life where people spend most of their daily time: work. In this article, we study thanks to linked employer employee panel administrative database the evolution of the probability of working in the same establishment for groups defined along several socio-economic dimensions —wage, occupation, education, age, gender, migratory status— in six countries: Canada, Denmark, France, Japan, Norway, and Sweden (results from Czech Republic, Germany, Hungary, Slovenia, and South Korea are forthcoming). For wage fractile groups, we utilize traditional measures of exposure (and respectively of isolation) with the “drop one” rule. For other groups, whose size varies throughout the period, we propose a relative net exposure. We find that the most dramatic shift is the growing separation of the top 1% earners at work and the decline in the exposure of this group to the bottom 25% and vice versa. This trend is particularly pronounced for France, Denmark and Sweden. The growing separation at work of top and bottom earners surpasses that of migrant and non-migrant, or that of male and female workers. We don’t find a similar isolation of the bottom 25%. The latter generally increases its intertwining with mid quartiles. These results show that the assortative matching mechanisms invoked for explaining the growing job polarization between high paying and low paying firms (Card et al., 2013; Song et al., 2015) may only be present at the very top of the wage hierarchy. We explore some of the mechanisms driving this trend: it takes place much more between firms than within firms with multiple establishments. Financialization, global cities, decrease in firm and establishment size also partly account for this evolution. We then look at some of the consequences of growing separation at work on social cohesion. We find also that residential segregation is also growing, although slower than segregation at work, with top earners increasingly living in different municipalities than bottom and median earners. Work segregation and residential segregation are correlated. We show that the former contributes to the later. This renews are understanding of residential segregation which is not only due to individual reluctance to interact but also to socio-economic process structuring work and territories.