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New Estimates for Wage Rate Inequality Using the Employment Cost Index

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  • Michael K. Lettau

Abstract

The Employment Cost Index measures the change in wage rates for a fixed set of jobs over time. The separate indices for industry and occupation groups grew at varying rates during the 1980s. However, their growth rates have been much more similar since then, which implies that the increase in the wage rates of low-wage workers relative to middlewage workers during the 1990s was due to changes in the mix of jobs. Had all workers remained in their jobs, the relative wage of low-wage to middle-wage workers would have remained constant.

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  • Michael K. Lettau, 2003. "New Estimates for Wage Rate Inequality Using the Employment Cost Index," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
    • Handle: RePEc:uwp:jhriss:v:38:y:2003:i:4:p792-805
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    4. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    5. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
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    Cited by:

    1. Conrad Frederick G. & Couper Mick P. & Sakshaug Joseph W., 2016. "Classifying Open-Ended Reports: Factors Affecting the Reliability of Occupation Codes," Journal of Official Statistics, Sciendo, vol. 32(1), pages 75-92, March.
    2. Grace Weishi Gu & Eswar Prasad & Thomas Moehrle, 2020. "New Evidence on Cyclical Variation in Average Labor Costs in the United States," The Review of Economics and Statistics, MIT Press, vol. 102(5), pages 966-979, December.
    3. Grace Weishi Gu & Eswar Prasad, 2018. "New Evidence on Cyclical Variation in Labor Costs in the U.S," NBER Working Papers 24266, National Bureau of Economic Research, Inc.

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