Employment polarization in regional labor markets: Evidence from the Netherlands

Abstract

Abstract This study investigates the existence and extent of employment polarization in the Netherlands between 1999 and 2012. We first determine an asymmetrically polarized employment growth nationally and in local labor markets, especially among young workers. Second, our dynamic panel system‐generalized method of moments instrumental variable approach documents that employment polarization is the combined outcome from the interplay between technology and international trade. Our analysis also uncovers novel insights considering the regional determinants of employment polarization; specifically, we demonstrate that employment growth is more likely to polarize in less densely populated regions and those with higher initial specialization in medium‐ and high‐skilled sectors.