NBER Working Paper 22110, March 2016
current draft July 2017
Using administrative employee-firm-level data on the entire private sector from 1994 to 2007, we show that the labor market in France has polarized: employment shares of high and low wage occupations have grown, while middle wage occupations have shrunk. Aggregate polarization was driven partly by changes within firms but mostly by changes in the composition of firms. At the same time, the share of hours worked in technology-related occupations ("techies") grew substantially, as did imports and exports, and we explore the causal links between these trends. Since technology adoption is mediated by technically qualified managers and technicians, we use a new measure of the propensity of a firm to adopt new technology: its employment share of techies. We find that techies were an important causal force driving polarization in France, as firms with more techies saw greater polarization and grew faster. Within manufacturing, firm-level o¤shoring reduced employment growth and caused skill upgrading, while exporting caused skill downgrading..