Differences in the Share of White-Collar Workers Between Rich and Poor Countries: Within-Industry Variation or Between Industry Variation?
There are differences in the share of white-collar workers in the workforce between rich and poor countries. Specifically, rich countries have higher shares of white-collar workers than poor countries. In this project, we investigate whether the differences reflect mainly variation in the share of white-collar workers within or between industries. Within-industry variation refers to differences in the share of white-collar workers in a specific industry between countries, and between-industry variation refers to a generalized difference in the share of white-collar workers due to differing industry allocations. This research question is important to understand which theories are best suited to analyze cross-country variation: theories stressing structural change across industries or changing organization of work within industries. In this study, we used country census samples from IPUMS International exclusively from the 2010s. Industry and occupation variables were included in the samples. This data was imported into RStudio, allowing us to perform a decomposition of the difference in the share of white-collar workers between rich and poor countries into between-industry and within-industry sums, respectively. The study’s results revealed a between sum of 0.142 and a within sum of 0.113, and a flipping of the decomposition revealed a between sum of 0.157 and a within sum of 0.0979. These results suggest that theories stressing structural change across industries may be better suited to analyze cross-country variation.