Disappearing middle class: job polarization and policy approaches

Abstract

The creeping hollowing out of the middle class and the simultaneous rise of automation have become hotly debated topics in the popular media and among policymakers, and there is certainly no shortage of dire predictions about the ascent of robots and subsequent obsolescence of workers. But – doomsday prophecies aside – what are the facts? What is happening to workers, specifically middle-class ones? And, from a policy perspective, what can (or should) be done to address this fundamental shift in who – or what – does which jobs?
This Public Paper tackles these questions head-on. We first identify the types of individuals who are likely to work in middle-class occupations and track how they act on the labor market outcomes. Then we evaluate policies proposed in recent years that have been aimed at combating the labor market malaise middle-class workers have experienced.