Over the last two decades employment in middle-skilled jobs has been squeezing in many developed countries particularly in the USA and UK (Acemoglu and Autor, 2011; Goos, Manning and Salomons, 2009). For the overall labour force, the employment change from the end of the 1980s to the end of the 2000s is characterized by a U-shape, i.e. employment increases in the high-skill jobs at the top and to some extent at the bottom but hardly at all in the middle of the skill distribution. This U-shaped pattern of employment change is termed as ‘job polarization’ by labour economists. Job polarization has often coincided with wage polarization – a decrease in wages in middle-skill jobs and an increase in wages in low-skill services and high-skill professional and managerial jobs (Acemoglu and Autor, 2011). The main reason behind job polarization as discussed in the literature is continual technological progress which favours the high-skill…show more content… This process allows us to obtain lowest to highest skill occupations and four task-based occupational categories – Non-routine manual, Routine manual, Routine cognitive and Non-routine cognitive. Next, we find evidence of job polarization in urban India particularly strong in the period after trade liberalisation. Our results suggest a somewhat upgrading employment change with shrinking employment share in routine manual occupations during the period 1983 to 1993. The subsequent period 1993-2004, on the other hand, has experienced a polarized employment change – sharp decrease in employment share in both routine manual and routine cognitive occupations in the middle and sharp increase in non-routine occupations in two extreme poles of the occupational hierarchy. The recent period 2004 to 2011 though follows a very similar pattern, employment share decreases in low-skill non-routine manual