Job polarisation and job quality

Job polarisation and job quality is an ambitious programme of research funded by the Economic and Social Research Council which aims to better understand the feature, implications and impact of the growth in recent years of bad and good jobs compared with mid-ranking jobs.

The research will provide original evidence on the role of firms in the growth of job polarisation and the impact that this process could have on the cost of welfare programmes. It also investigates the decline in the number of mid-ranking jobs and asks if it is preventing the low-paid from moving into better-paid jobs, limiting social mobility and impacting negatively on wellbeing.

Background

Recent evidence shows that labour markets across Europe and the US have become increasingly polarized as the growth of bad (low-pay, low-skills) and good (high-pay, high-skills) jobs has exceeded that of mid-ranking jobs in recent years. This poses a number of policy challenges.

The growing number of low-paid workers may increase the cost of welfare-to-work programmes whilst the relative decline in middle-pay jobs can hinder the chances of the low-paid of moving into better-paid jobs, limiting social mobility.

Understanding the causes of polarisation, its features and its implications is crucial to design effective policies to tackle these challenges.

What the research will do

The research comprises several projects which, combined, aim to create a more detailed and accurate picture of the evidence and impacts of job polarisation than has ever been possible before. The projects will:

• Provide new and unique evidence using micro-data on British firms to gain a better understanding of what drives polarisation. By exploiting information on workers matched to their employers, the project will also provide the first evidence of the links between polarization and other aspects of job quality with direct impact on people’s wellbeing, such as job satisfaction and work intensity.
• Examine the link between job polarisation and other dimensions of job quality using a range of datasets on individuals and firms covering all EU countries over the past decade. It looks at the implications of the effects of job polarisation on job quality including job satisfaction, autonomy and work intensity and will paint a previously unavailable picture of worker wellbeing in a polarised labour market.
• Look at the implications of polarisation for fiscal policy, using microsimulation methods to assess the impact of expected polarisation-driven changes in labour markets on government revenue and expenditure, with a particular focus on the cost of in-work benefit systems. The analysis includes a number of EU countries and is the first to highlight the challenges for fiscal policy arising from these structural labour market changes.
• Investigate whether polarisation has affected the ability of low-paid workers to progress up the wage distribution in the UK. It uses data on individuals from the past twenty years and provides a first empirical examination of whether the loss of middle-pay jobs increases the chances of “low-pay traps”.