The past decade has been a period of considerable change in the labour market, in particular in the latter years when the economy has experienced recession and emerging recovery. Over the longer-term, as the economy has been increasingly based on knowledge rather than routine production, new jobs have been created in large numbers in high-skill, high-wage professional and managerial occupations. Yet the last decade has also seen growth in lower wage service occupations, combined with a reduction in middle-wage occupations, leading to concerns of employment polarisation. In short, there appears to be a gradual hollowing-out of the labour market.

This hollowing-out has lead some commentators to talk of the labour market as being increasingly structured like an hourglass, and bifurcated into good and bad jobs. This report investigates the evidence and implications of these changes in the labour market. It finds evidence for employment polarisation, with technological change reducing the demand for routine workers in administrative and secretarial, and process, plant and machine operative occupations.

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