The Anatomy of Polarization: Evidence from Worker Flows

June 22, 2026

Working Paper 2026-7

Abstract: Using longitudinal French administrative data (1984-2021), we document that employment polarization after 1994 reflects major changes in labor-market entry rather than mass occupational downgrading or displacement of incumbents. Flows from routine to abstract occupations remain substantial throughout the period, and a large fraction of these upgrades is due to noncollege workers. The decisive shift that generates polarization occurs at the entry margin: the net flow from nonemployment into routine occupations reverses around 1994, while the net flow from nonemployment into manual work increases. These patterns motivate life-cycle models of occupational choice that explicitly incorporate cohort heterogeneity and separate entry and re-entry margins./p>

JEL classification: J62, J24, J21

Key words: labor market polarization; worker flows; occupational mobility; routine-biased technological change; longitudinal data

https://doi.org/10.29338/wp2026-07

Fabio Cerina is with the University of Cagliari and CRENoS. Elisa Dienesch is with the University of Cagliari, CRENoS, and AMSE. Alexander Monge-Naranjo is with the Federal Reserve Bank of Atlanta, Emory University, and CEPR. Alessio Moro is with the University of Cagliari, CEPR, and IZA@LISER.

The authors thank participants in the Aix-en-Provence seminars and Cagliari workshops (Brucchi Luchino; "Inequalities and Labor Markets") and Simone Nobili for excellent research assistance. Cerina, Dienesch, and Moro acknowledge financial support from the Italian PNRR funded by NextGenerationEU "The Role of Skill-Biased Technological Change in Immiserizing Growth, Spatial Polarization, and Product Quality Upgrading" (CUP F53D23003240006). Monge-Naranjo thanks financial support from the Research Council of the European University Institute. The views expressed here are those of the authors and do not necessarily reflect the opinion of the Federal Reserve Bank of Atlanta or the Federal Reserve System.

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