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Earnings inequality and skill mismatch in the U.S.: 1973–2002

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  • Fabián Slonimczyk

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Abstract

This paper shows that skill mismatch is a significant source of inequality in real earnings in the U.S. and that a substantial fraction of the increase in wage dispersion during the period 1973–2002 was due to the increase in mismatch rates and mismatch premia. In 2000–2002, surplus and deficit qualifications taken together accounted for 4.3 and 4.6% of the variance of log earnings, or around 15% of the total explained variance. The dramatic increase in over-education rates and premia accounts for around 20 and 48% of the increase in the Gini coefficient during the 30 years under analysis for males and females respectively. The surplus qualification factor is important in understanding why earnings inequality polarized in the last decades. Copyright Springer Science+Business Media, LLC. 2013

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Bibliographic Info

Article provided by Springer in its journal The Journal of Economic Inequality.

Volume (Year): 11 (2013)
Issue (Month): 2 (June)
Pages: 163-194

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Handle: RePEc:kap:jecinq:v:11:y:2013:i:2:p:163-194

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Web page: http://springerlink.metapress.com/link.asp?id=111137

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Keywords: Skill mismatch; Earnings inequality; Shapley value decomposition; J31;

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Cited by:
  1. Slonimczyk, Fabián & Skott, Peter, 2012. "Employment and distribution effects of the minimum wage," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 245-264.
  2. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).

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