Is employment really polarizing? Evidence from the Portuguese Labor Market

Employment Polarization is often identified as one of the factors driving the growing wage inequality in western economies. But is employment polarization informative about wage inequality and is employment really polarizing? This is the general question driving this paper. By equating a job with an individual rather than an occupation, we re-assess whether Portuguese workers are increasingly concentrated in low and high-wage jobs relative to middle-wage jobs. For this purpose, we assign workers from the Quadros de Pessoal to real hourly wage bins with time-invariant thre sholds and find that, over time, workers increasingly concentrate in the upper bins and diverge from the lower bins, inconsistent with Employment Polarization. Turning to Wage Polarization analysis, we perform and extend the Foster-Wolfson test and find no evidence of wage polarization either.Ourresults contradict the literature and, most importantly, suggest that the channel through which Employment and Wage Polarization are connected is more complex than common lyassumed