Work organization and job polarization

This paper contributes to the literature on job polarizaton, whereby mid-skill jobs disappear because of increased mechanization and digitization of routine tasks. While the recent empirical literature has focused on the relative importance of technical change and globalization as the main drivers of job polarization, the role of within firm organizational changes has remained unexplored. Our study contributes to filling this gap by investigating how technological and organizational changes affect the mix of jobs within the firm. To this end we merge two firm level surveys from Denmark and add registry data to gain detailed knowledge of changes in the firms’ occupational structure. We construct measures of work organization in line with previous research and using a translog model we show that changes in work organization are associated with polarization by substituting and complementing different skill groups, even in the absence of technological change and changes in offshoring. The results show not only that the organizational level is central to understanding possible trends towards job polarization, but also demonstrate that changes in work organization often co-occur with changes in technology and in offshoring behavior, leading to interactions effects between organizational change, and technology and offshoring on job polarization.