The Internet Is Changing the Demand for Skills
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Is the Internet Increasing Labor Market Polarization in ECA? Some of the technologies associated with the Internet can help to explain the decline in demand for workers performing routine tasks (see, for example, Acemoglu and Autor 2011; Autor and Dorn 2013; Autor, Katz, and Kearney 2008). Moreover, the Internet has been associated with an increasing polarization of the labor market, where routine middle-skill occupations disappear and both low- and high-skill occupations represent a rising share of the total number of jobs. The ECA region experienced, on average, a larger decline in routine employment than other parts of the world, mirrored by an increase in high- and low-skill occupations (figure 5.3). Within ECA, the share of routine workers has fallen in every subregion. The degree of labor market polarization across ECA countries does not seem to be driven by the stage of development, as Western European countries experienced a decrease similar to the regional average, while poorer countries (such as Central Asia, Turkey, and the Western Balkans) experienced both the largest and the smallest changes. The more rapid labor market polarization in ECA than elsewhere is not entirely due to the Internet, as the depth of Internet adoption by individuals and firms tends to be lower in ECA than in many other regions (see chapters 1–4). Figure 5.3 Labor markets are becoming more polarized everywhere, especially in ECA
Annual average change in employment, 1995–2012, (percentage points)
0.6 0.4 0.2 0 –0.2 –0.4 –0.6 –0.8 Western, Southern, and Northern Europe
Rest of Europe and central Asia
Middle East and North Africa
High-skilled occupations
SubSaharan Africa
North America
Middle-skilled occupations
South Asia
Latin America and the Caribbean
East Asia and Pacific
Low-skilled occupations
Source: World Bank 2016. Note: The figure displays changes in employment shares between circa 1995 and circa 2012 for countries with at least seven years of data. The classification follows Autor 2014. High-skilled occupations (intensive in non routine cognitive and interpersonal skills) include legislators, senior officials, and managers, professionals, and technicians and associate professionals. Middle-skilled occupations (intensive in routine cognitive and manual skills) comprise clerks, craft and related trades workers, plant and machine operators and assemblers. Low-skilled occupations (intensive in non-routine manual skills) refer to service and sales workers and elementary occupations. For the United States, comparable data could be accessed only for a short period (2003–08); consistent with Autor (2014), the observed polarization is limited in this period, with most of it having taken place in earlier years.