Abstract
Wage inequality between education groups in Germany has increased sharply in recent decades. This paper studies how compositional changes to the occupational structure and the geographic distribution of different types of jobs have affected this type of inequality. Employment has shifted away from traditionally mid-paying production occupations towards higher-paying cognitive/interactive occupations, and – to a lesser extent – towards low-paying manual services. However, only workers with university degrees have benefited from the expansion of higher-paid work. This increase in polarization played out relatively evenly across space. While such occupational shifts can contribute to between-group wage inequality, in the German case, the increase in occupational polarization was not large enough to materially contribute to wage inequality between education groups.
Lüttge, Julius