Labour Market Polarisation in Germany: Looking at the long-run patterns

Aug 02, 2019
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The effects of digitalisation on employment and wages have long been at the centre of public and political debate. Hardly a week goes by without new forecasts being announced about possible job losses in the course of digitalisation. Forecasts of this kind are often quoted in the negative scenarios of the media. However, they have numerous weaknesses, so the conclusion of massive job losses in the course of digitalisation is at least controversial. After all, the forecasts usually neglect the emergence of new jobs and occupations (which are often only possible through the application of digital technologies) and generally underestimate the adaptability of employees to technological change. Particularly with regard to the last point, discussions about the future of work often lose sight of how the development of work has been already marked by a technology-induced structural change.


A large literature on labour market polarisation characterises and measures these processes at an aggregate level. However, to date, there is little information regarding the individual worker adjustment processes related to routine-biased technological change.

A recent study, conducted by the Bertelsmann Stiftung and the German RWI (Leibniz Institute for Economic Research), revisits this issue using German administrative data that allows us to address a range of questions currently unanswered in the literature. In doing so, the study:

  • provides micro evidence on the long-run effects of labour-market polarisation on Germany
  • offers detailed evidence on the nature of the labour market experiences of routine workers, also taking into account occupation-specific measures of task intensity that vary over time
  • presents the first evidence on changes in task intensity of jobs over a long period and at an annual level 

This allows us to challenge the trend in polarisation over time which, according to the previous literature, is important both in periods of heightened polarisation and/or accentuated cyclical patterns. Thus, the study shows that neither is the case in Germany. In this context, polarisation represents a steady change over the period of 1975 to 2014. Any cyclical pattern is dominated by this process. This is important as it suggests ongoing structural change without episodes of heightened changes in employment task shares.


With this as a starting point, the study seeks to understand the worker transitions contributing to these patterns. In this regard the main findings of the study are:

  • The German labour market shows a steady shift in employment away from routine, middle-skill occupations, to non-routine cognitive (NRC) and non-routine manual tasks (NRM) for both, men and women (Figure 1a, Figure 1b). 

Figure 1a: Employment shares of task categories, 1975-2014, men

Figure 1b: Employment shares of task categories, 1975-2014, women

Source: Bachmann, R., Cim, M und Green, C. (2018). ‘Long-run Patterns of Labour Market Polarisation: Evidence from German Micro Data’. Bertelsmann Stiftung, Gütersloh, pages 14 and 15
  • Exposure to jobs with higher routine-task content is associated with higher risk of being out of employment in both the short term (after one year) and medium term (five years). Subsequent results show that this employment penalty to routineness of work has increased over the past four decades. 
  • More generally, routine task work is associated with reduced job stability and more likelihood of experiencing periods of unemployment.
  • Surprisingly, these negative effects of routine work appear to be concentrated in increased employment to employment, and employment to unemployment transitions rather than longer periods of unemployment (Figure 2). Unemployed people who previously had a particularly routine job show higher transition rates to employment than unemployed people from the “non-routine cognitive” (NRC) and “non-routine manual” (NRM) task groups. While the likelihood of losing one's job has increased among routine workers, their chances of reemployment are comparatively good. Further analyses show that more highly qualified workers with routine tasks in particular are able to find a new job quickly, while the less qualified are less so.

Figure 2: Unemployment exit rate, by task category, 1979-2014

Source: Bachmann, R., Cim, M und Green, C. (2018). ‘Long-run Patterns of Labour Market Polarisation: Evidence from German Micro Data’. Bertelsmann Stiftung, Gütersloh, page 21.
  • Exposure to jobs with higher routine-task content is associated with higher risk of being out of employment in both the short term (after one year) and medium term (five years). Subsequent results show that this employment penalty to routineness of work has increased over the past four decades.

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Future of Education & SkillsNew Jobs & OccupationsOECD Forum 2019

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Manuela Barišić

Senior Project Manager, Rethinking Work Program , Bertelsmann Stiftung

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