EXISTENCE AND ANATOMY OF JOB POLARIZATION IN PAKISTAN

Abstract

The paper presents evidence on the existence of job polarization over time and across skill groups in Pakistan between 1996 and 2014 following Goos and Manning (2007) and Autor (2010). This is the first paper in Pakistan and its peer countries to explore this issue. The study explores whether the growth in top jobs, defined by high paid- high skill occupations exceeds that of the middling jobs. Further, the anatomy behind the employment shifts at both the top of the occupational skill distribution and the bottom are also explored through the movement and composition of educational groups in each decile and each occupation. The study of this phenomenon explains the impact of polarization on the different educational skill groups i.e. whether employment has polarized for this skill group. The data source is Labour Force Survey for years 1996 till 2014. Occupations are taken at 2-digit level following the ISCO-88 coding. The overall objective is to capture the trend of occupational employment change as to assess whether the use of technology has resulted in any structural change in the country or not. We find that once occupations are sorted into high paid, middle paid and low paid jobs, the change in employment share goes in coincide with the polarization phenomenon. Occupations ranked by the mean education level generate the same results. Further, the shift share analysis at decile level and at occupation level revealed that while the middle paid jobs are increasing on an aggregate level, within sectors at occupation level, an effect of technology is prevalent. Our results support the theory of job polarization in few of the sectors. On the policy frontage, the importance of higher capital absorption and high job growth is emphasized as it was found that educational groups very insignificantly contributed to increasing employment share in the occupations.