Schumpeterian Growth Theory and the Dynamics of Income Inequality
AbstractIn this lecture, it is argued that Schumpeterian Growth Theory, in which growth is driven by a sequence of quality-improving innovations, can shed light on two important puzzles raised by the recent evolution of wage inequality in developed economies. The first puzzle concerns wage inequality between educational groups, which has substantially risen in the US and the UK during the past two decades following a sharp increase in the supply of educated labor. The second puzzle concerns wage inequality within educational groups, which accounts for a large fraction of the observed increase in wage inequality, although in contrast to between-group wage inequality it has mainly affected the temporary component of income. The definitive version is available at www3.interscience.wiley.com.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3350067.
Date of creation: 2002
Date of revision:
Publication status: Published in Econometrica
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