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Decomposing the education wage gap: everything but the kitchen sink

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  • Julie L. Hotchkiss
  • Menbere Shiferaw

Abstract

This paper contributes to a large literature concerned with identifying the source of the widening wage gap between high school and college graduates by providing a comprehensive, multidimensional decomposition of wages across both time and educational status. Data from a multitude of sources are brought to bear on the question of the relative importance of labor market supply and demand factors in the determination of those wage differences. The results confirm the importance of investments in and use of technology, which has been the focus of most of the previous literature, but are also able to show that demand and supply factors played very different roles in the growing wage gaps of the 1980s and 1990s.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2010-12.

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Date of creation: 2010
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Handle: RePEc:fip:fedawp:2010-12

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References

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  4. Thomas Lemieux, 2006. "Postsecondary Education and Increasing Wage Inequality," American Economic Review, American Economic Association, vol. 96(2), pages 195-199, May.
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  7. Christopher H. Wheeler, 2005. "Evidence on wage inequality, worker education, and technology," Review, Federal Reserve Bank of St. Louis, issue May, pages 375-393.
  8. Daniel Fernandez Kranz, 2006. "Why has wage inequality increased more in the USA than in Europe? An empirical investigation of the demand and supply of skill," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 771-788.
  9. Boris Hirsch & Marion König & Joachim Möller, 2009. "Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap," Working Papers 083, Bavarian Graduate Program in Economics (BGPE).
  10. Dumond, J Michael & Hirsch, Barry T & Macpherson, David A, 1999. "Wage Differentials across Labor Markets and Workers: Does Cost of Living Matter?," Economic Inquiry, Western Economic Association International, vol. 37(4), pages 577-98, October.
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  12. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
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  16. Todd Schoellman & Lutz Hendricks, 2009. "Student Abilities During the Expansion of U.S. Education, 1950-2000," 2009 Meeting Papers 162, Society for Economic Dynamics.
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  18. Daniel Aaronson & Daniel Sullivan, 2001. "Cross-state evidence on the relationship between unemployment and wage growth," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue May.
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  22. Julie L. Hotchkiss & M. Melinda Pitts & Mary Beth Walker, 2010. "Assessing the impact of education and marriage on labor market exit decisions of women," Working Paper 2010-02, Federal Reserve Bank of Atlanta.
  23. Julie L. Hotchkiss & M. Melinda Pitts & John C. Robertson, 2006. "The push-pull effects of the information technology boom and bust: insight from matched employer-employee data," Working Paper 2006-01, Federal Reserve Bank of Atlanta.
  24. Autor, David & Dorn, David, 2009. "Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States," IZA Discussion Papers 4290, Institute for the Study of Labor (IZA).
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Cited by:
  1. Grinstein-Weiss, Michal & Sherraden, Michael & Gale, William G. & Rohe, William M. & Schreiner, Mark & Key, Clinton, 2013. "Long-term effects of Individual Development Accounts on postsecondary education: Follow-up evidence from a randomized experiment," Economics of Education Review, Elsevier, vol. 33(C), pages 58-68.
  2. Jean-Marie Viaene & Itzhak Zilcha, 2011. "Public Funding of Higher Education," CESifo Working Paper Series 3606, CESifo Group Munich.

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