Job Opportunities and Industrial Transformation in Taiwan, 1978-2012

Yi-Chun Chang, National Taiwan University

In this paper, I document the trends in the distribution of employment opportunities in Taiwan, and examine three possible explanations of recent deterioration of the labor market, including China impact, party politics and industrial transformation. Applying the relative distribution method (Handcock and Morris 1999) on data from the 1978-2012 Manpower Survey, I find that (1) the median wage of all jobs increased from 1978 to 1995 and then stagnated; (2) the wage distributions of jobs polarized in the 1980s and the 2000s, with a relatively stable period in between; (3) the higher-paying jobs decreased and the lower-paying jobs increased since 2000; (4) young workers faced decreasing number of higher-paying jobs and increasing number of lower-paying jobs, while the reverse is true for the middle-aged workers. These findings are more consistent with the industrial transformation hypothesis, and the young workers were more sensitive to the transformation of labor market.