JOB POLARIZATION AND WAGE INEQUALITY IN THE REPUBLIC OF MOLDOVA

Author

, Doctor habilitatum in Economics, Professor, Strada Mitropolit Gavriil Bănulescu-Bodoni 61, Chișinău 2005, Молдова
, University Lecturer, Strada Mitropolit Gavriil Bănulescu-Bodoni 61, Chișinău 2005, Молдова

In heading

Economic theory;

Signed print

20.11.2020

Issues number

2020 - № 4 (43)

Page

11-25

Type of articles

Scientific article

Code UDK

331.2 (478)

ISSN print

2411-5584

Abstract

Problem conceptualisation. Over the last decades, the polarization of work, in general, and jobs, in particular, has been the research subject for many researchers in different countries. Analysing the specialized literature, we can find that there are several criteria that can be taken into account in the polarization of work, and namely: technological changes focused on specific professional skills, increasing education, trade deregulation, increasing the service sector, employer preferences, state policies in the field, organizational changes, salary level and salary inequalities, etc. Taking into account the wide range of criteria that can be taken into account when polarizing work and jobs, in this paper we will discuss the issue of wages and wage inequalities. Job polarization spontaneously leads to wage inequality, as the share of the highest paid jobs and lowest wages is increasing. In addition, the polarization of the workforce can also influence the wage level in occupations, by regaining new professional skills. In this respect, there may be three possible outcomes. First, there is a demand-driven situation. The change in labour demand for certain occupations also determines the change of jobs. Assuming a constant supply, the growing demand for high and low wage occupations leads to an increase in higher and lower wages, while the demand and, consequently, the wages for medium-skilled occupations is declining (Autor, Katz, & Kearney, 2008). The relationship between job polarization and wage inequality turns to be positive then. Second, occupational changes can be determined by supply. The modernization of occupations may lag behind the expansion of higher education, thus pushing the highly skilled workforce into lower jobs, creating an excessive supply of skills associated with eroded wages (Autor, Katz, & Kearney, 2008); (Beaudry, & Green, 2003). This leads to the creation of an excessive supply for lower paid occupations,
leading to salary cuts for those occupations. Meanwhile, the talented workforce stays in medium-skill level occupations, which leads to an increase in average salaries. In this case, the relationship between the polarization of occupations and wage inequality is negative. Third, technological changes can lead to increased requirements for professional skills within occupations, while educational expansion and the growing demand for higher education skills are witnessing a period of balanced growth. This leads to increased productivity for all occupations and, ultimately, to higher wages. The direct relationship is unclear then and both salaries and employment depend on the development of professional skills in occupations rather than on their changes.

Keywords

work, job, professional skills, qualification level, salaries, wage inequality

Reviewer

External reviewer

Article in PDF

11-25

Bibliography

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Code DOI

10.31359/2411‑5584‑2020‑43‑4‑11

20.11.2020