David Dorn - Research

Research Papers

"Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States"
(with David Autor), January 2010.

After a decade in which wages and employment fell precipitously in low-skill occupations and expanded in high-skill occupations, the shape of U.S. earnings and job growth sharply polarized in the 1990s. Employment shares and relative earnings rose in both low and high-skill jobs, leading to a distinct U-shaped relationship between skill levels and employment and wage growth. This paper analyzes the sources of the changing shape of the lower-tail of the U.S. and wage and employment distributions. A first contribution is to document a hitherto unknown fact: the twisting of the lower tail is substantially accounted for by a single proximate cause-rising employment and wages in low education, in-person service occupations. We study the determinants of this rise at the level of local labor markets over the period of 1950 through 2005. Our approach is rooted in a model of changing task specialization in which 'routine' clerical and production tasks are displaced by automation. We find that in labor markets that were initially specialized in routine-intensive occupations, employment and wages polarized after 1980, with growing employment and earnings in both high-skill occupations and low-skill service jobs.

"Price and Prejudice: The Interaction between Preferences and Incentives in the Dynamics of Racial Segregation"
January 2010.

In the classic Schelling tipping model, white residents flee a neighborhood when the minority resident share exceeds a personal tolerance threshold. Thus, a small movement in minority share beyond a tipping point can cause an integrated neighborhood to segregate rapidly. A key limitation of the Schelling model is that it does not consider the role of expectations and prices in the tipping process. This paper explores an augmented tipping model in which white and minority renters and homeowners interact both spatially (sharing a neighborhood) and financially through rents and house prices. I show that the market mechanism can exacerbate the tipping process: homeowners face a pecuniary incentive to sell their houses prior to neighborhood tipping to avoid a loss in house value, whereas renters are less exposed to tipping because they bear no such asset risk. Hence, high rates of homeownership among white residents make neighborhoods more likely to tip. Building on recent work by Card, Mas, and Rothstein, this study evaluates this prediction by analyzing the interaction between initial homeownership rates and neighborhood tipping between 1970 and 2000 across a large sample of Metropolitan Statistical Areas (MSAs). The results show that when neighborhoods tip, those with high ownership rates experience substantially larger white population loss and a larger decline in house prices. In addition, homeowners are disproportionately likely to exit a neighborhood when tipping occurs, and income and education levels fall, in particular among whites. These findings provide initial evidence that tipping, usually considered a nonmarket interaction, is augmented by market forces.

"This Job Is 'Getting Old:' Measuring Changes in Job Opportunities Using Occupational Age Structure"
(with David Autor), American Economic Review, Papers and Proceedings, 99(2), 45-51, 2009.

High- and low-wage occupations are expanding rapidly relative to middle-wage occupations in both the U.S. and the E.U. We study the reallocation of workers from middle-skill occupations towards the tails of the occupational skill distribution by analyzing changes in age structure within and across occupations. Because occupations typically expand by hiring young workers and contract by curtailing such hiring, we posit that growing occupations will get younger while shrinking occupations will `get old.' After verifying this proposition, we apply this observation to local labor markets in the U.S. to test whether markets that were specialized in middle-skilled occupations in 1980 saw a differential movement of both older and younger workers into occupations at the tails of the skill distribution over the subsequent 25 years. Consistent with aggregate trends, employment in initially middle-skill-intensive labor markets hollowed-out between 1980 and 2005. Employment losses among non-college workers in the middle of the occupational skill distribution were almost entirely countered by employment growth in lower-tail occupations. For college workers, employment losses at the middle were offset in roughly equal measures by gains in the upper- and lower-tails of the occupational skill distribution. But gains at the upper-tail were almost entirely limited to young college workers. Consequently, older college workers are increasingly found in lower-skill, lower-paying occupations.

Publications, pre-PhD

"'Voluntary' and 'Involuntary' Early Retirement: An International Analysis" (with Alfonso Sousa-Poza), Applied Economics 42(4): 427-438, 2010.

"Direct Democracy and Life Satisfaction Revisited: New Evidence for Switzerland" (with Justina Fischer, Gebhard Kirchgässner and Alfonso Sousa-Poza), Journal of Happiness Studies 9(2): 227-251, 2008.

"Is It Culture or Democracy? The Impact of Democracy and Culture on Happiness" (with Justina Fischer, Gebhard Kirchgässner and Alfonso Sousa-Poza), Social Indicators Research 82(3): 505-526, 2007.

"The Determinants of Early Retirement in Switzerland" (with Alfonso Sousa-Poza), Swiss Journal of Economics and Statistics 141(2): 247-283, 2005.

"Why is the Employment Rate of Older Swiss so High? An Institutional Analysis" (with Alfonso Sousa-Poza), Geneva Papers on Risk and Insurance 28: 652-674, 2003.

Books

Die Berechnung des Erwerbsschadens (The Computation of Earnings Damages in Liability Cases; with Michael Graf, Thomas Geiser and Alfonso Sousa-Poza), Berne: Stämpfli, pp. 178, 2008.

An Empirical Analysis of Early Retirement. Switzerland in an International Comparison Berne-Stuttgart-Vienna: Haupt, pp. 116, 2004.

Neugründungen von innovativen Kleinstunternehmen. Probleme ihrer Realisierung. (Innovative Business Ventures: Challenges for Start-Ups; with Stefan Graf, Fred Henneberger and Hans Schmid), Berne-Stuttgart-Vienna: Haupt, pp. 178, 2001.