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WAGE INEQUALITY IN THE UNITED STATES DURING THE 1980s: RISING DISPERSION OR FALLING MINIMUM WAGE?

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David S. Lee
Abstract

The magnitude of growth in "underlying" wage inequality in the United States during the 1980s is obscured by a concurrent decline in the federal minimum wage, which itself could cause an increase in observed wage inequality. This study uses regional variation in the relative level of the federal minimum wage to separately identify the impact of the minimum wage from nationwide growth in "latent" wage dispersion during the 1980s. The analysis suggests that the minimum wage can account for much of the rise in dispersion in the lower tail of the wage distribution, particularly for women. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 114 (1999)
Issue (Month): 3 (August)
Pages: 977-1023
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Handle: RePEc:tpr:qjecon:v:114:y:1999:i:3:p:977-1023

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  1. Natalya Y. Shelkova, 2008. "Low-Wage Labor Markets and the Power of Suggestion," Working papers 2008-33, University of Connecticut, Department of Economics, revised Dec 2008. [Downloadable!]
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  2. Kevin A. Bryan & Leonardo Martinez, 2008. "On the evolution of income inequality in the United States," Economic Quarterly, Federal Reserve Bank of Richmond, issue Spr, pages 97-120. [Downloadable!]
  3. Ronald Benabou, 2002. "Human capital, technical change and the welfare state," Temi di discussione (Economic working papers) 465, Bank of Italy, Economic Research Department. [Downloadable!]
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  4. KAWAGUCHI Daiji & MORI Yuko, 2008. "Stable Wage Distribution in Japan, 1982-2002: A Counter Example for SBTC?," Discussion papers 08020, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  5. Felipe Balmaceda, 2008. "Firm-Provided Training and Labor Market Policies," Documentos de Trabajo 252, Centro de Economía Aplicada, Universidad de Chile. [Downloadable!]
  6. Sara Lemos, 2004. "A Menu of Minimum Wage Variables for Evaluating Wages and Employment Effects: Evidence from Brazil," Discussion Papers in Economics 04/3, Department of Economics, University of Leicester. [Downloadable!]
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  7. Mariano Bosch & Marco Manacorda, 2008. "Minimum Wages and Earnings Inequality in Urban Mexico. Revisiting the Evidence," CEP Discussion Papers dp0880, Centre for Economic Performance, LSE. [Downloadable!]
  8. Koeniger, Winfried & Leonardi, Marco & Nunziata, Luca, 2004. "Labour Market Institutions and Wage Inequality," IZA Discussion Papers 1291, Institute for the Study of Labor (IZA). [Downloadable!]
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