Delving into the demand side: Changes in workplace specialization and job polarization

We show that occupational specialization within workplaces in Great Britain is high and is increasing over time. Alongside this increase in specialization, there has been a substantial shift towards specialization in non-routine occupations. This shift accounts for much of the expansion in the aggregate employment share of these occupations documented in the literature on job polarization. Using unique information on outsourcing behavior at the workplace level, we show that the increased specialization in non-routine cognitive occupations is linked to increasing trade in cognitive tasks between firms.