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The Anatomy of Polarization - Evidence from Worker Flows
Using longitudinal French administrative data (1984--2021), we document that employment polarization after 1994 reflects major changes in labor-market entry rather than mass occupational downgrading or displacement of incumbents. Flows from routine to abstract occupations remain substantial throughout the period, and a large fraction of these upgrades is due to non-college workers. The decisive shift that generates polarization occurs at the entry margin: the net flow from non-employment into routine occupations reverses around 1994, while the net flow from non-employment into manual work increases. These patterns motivate life-cycle models of occupational choice that explicitly incorporate cohort heterogeneity and separate entry and re-entry margins.
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