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The Grocery Stores' Wage Distribution: A Semi-Parametric Analysis Of The Role Of Retailing And Labor Market Institutions

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Author Info

  • Budd, John W.
  • McCall, Brian P.

Abstract

How and why has the wage distribution in U.S. grocery stores changed between 1984 and 1994? Unlike other industries in the time period, the important change in the wage distribution is not rising inequality, but the real wages fell across the entire wage distribution. Changes in labor market institutions explain more than half of the change in the wage distribution in grocery stores. Specifically, the decline in the real value of the minimum wage explains little of the decline in the mean real wage but much of the change in the shape of the distribution between 1984 and 1994, and 95 percent of the decline at the lowest 10th percentile. The decline in union coverage in grocery stores and the narrowing of the union-nonunion wage gap explains much of the decline above the 25th percentile. A third institutional change, the use of part-time employees, is not associated with the changes in grocery industry wage outcomes. One might think that the major changes in operation and technologies that occurred during this time period are at least contributing factors, but we find quite the contrary. If average store size, weekly operating hours, and the use of scanning technology had remained at their 1984 levels, the real wage decline would have been even greater than that actually seen, and for the entire wage distribution. Changes in grocery retailing prevented and even greater decline in real wages. Again unlike many other industries, skill-biased technological change does not appear important for grocery industry wage outcomes. The basis of our analysis is a statistical technique which combines nonparametric kernel density estimation with a parametric re-weighting, applied to Current Population Survey data supplemented with secondary data sources on the Grocery industry.

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Bibliographic Info

Paper provided by University of Minnesota, The Food Industry Center in its series Working Papers with number 14347.

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Date of creation: 1999
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Handle: RePEc:ags:umrfwp:14347

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Fax: 612-625-2729
Web page: http://foodindustrycenter.umn.edu/
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Related research

Keywords: Agribusiness; Labor and Human Capital;

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References

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  1. repec:fth:prinin:399 is not listed on IDEAS
  2. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-44, September.
  3. Kinsey, Jean D. & Senauer, Benjamin & King, Robert P. & Phumpiu, Paul F., 1996. "Changes In Retail Food Delivery: Signals For Producers, Processors And Distributors," Working Papers 14352, University of Minnesota, The Food Industry Center.
  4. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring.
  5. David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
  6. John DiNardo & Thomas Lemieux, 1997. "Diverging male wage inequality in the United States and Canada, 1981-1988: Do institutions explain the difference?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(4), pages 629-651, July.
  7. 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 1333-81, September.
  8. Chinhui Juhn, 1999. "Wage inequality and demand for skill: Evidence from five decades," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(3), pages 424-443, April.
  9. Gary Burtless, 1995. "International Trade and the Rise in Earnings Inequality," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 800-816, June.
  10. George E. Johnson, 1997. "Changes in Earnings Inequality: The Role of Demand Shifts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 41-54, Spring.
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Cited by:
  1. Budd, John W. & McCall, Brian P., 1999. "Decomposing Changes In Retail Food Wage Distributions, 1983-1998: A Semi-Parametric Analysis," Working Papers 14327, University of Minnesota, The Food Industry Center.

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