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Low skill wages and mismeasured inflation

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  • Luís Guimarães

Abstract

The current literature presents evidence that the real wage of male workers at the 10th percentile of the wage distribution has fallen since 1970. Yet, contributions within this literature deflate nominal wages using a mismeasured deflator. Another strand of literature documents that the mismeasurement of the deflator is sizable, with recent estimates exceeding0.6 percentage points per year. In this paper, I adjust the deflator and reestimate the implied evolution of male low skill wages. This simple exercise implies that male low skill wages were about 15 log-points higher in 2013 than in 1970.

Suggested Citation

  • Luís Guimarães, 2019. "Low skill wages and mismeasured inflation," Applied Economics Letters, Taylor & Francis Journals, vol. 26(11), pages 909-913, June.
  • Handle: RePEc:taf:apeclt:v:26:y:2019:i:11:p:909-913
    DOI: 10.1080/13504851.2018.1520961
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