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Changes in the Structure of Wages During the 1980's: An Evaluation of Alternative Explanations

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  • John Bound
  • George E. Johnson

Abstract

Between 1979 and 1987 there were three significant changes in the wage structure in the United States. the pecuniary returns to schooling increased by about a third; the wages of older relative to younger workers with relatively low education increased to some extent; and the wages of women relative to men rose by almost ten percent. It is important for policy purposes to know why these changes occurred and whether they are temporary or permanent. The paper investigates several alternative explanations of these wage structure phenomena, including the most popular ones that their principal causes were shifts in the structure of product demand, skilled-labor saving technological change, and changes in the incidence and level of rents received by lower skilled workers. our reading of the evidence suggests that the major cause of the dramatic movements in the wage structure during the 1980's may have been some combination of changes in both production technology and the average relative nonobserved quality of different labor groups.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2983.

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Date of creation: May 1989
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Publication status: published as American Economic Review, 82:_371-92, June 1992
Handle: RePEc:nbr:nberwo:2983

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  1. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
  2. Richard B. Freeman, 1979. "The Effect of Demographic Factors on Age-Earnings Profiles," NBER Working Papers 0316, National Bureau of Economic Research, Inc.
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Cited by:
  1. Lawrence Katz & Alan Krueger, 1991. "Changes in the Structure of Wages in the Public and Private Sectors," Working Papers 662, Princeton University, Department of Economics, Industrial Relations Section..
  2. Rebekka Christopoulou & Theodora Kosma, 2011. "Skills and wage inequality in Greece: evidence from matched employer-employee data, 1995-2002," Working Papers 123, Bank of Greece.
  3. Alan Barrett & Tim Callan & Brian Nolan, 1997. "The Earnings Distribution and Returns to Education in Ireland, 1987-1994," Papers WP085, Economic and Social Research Institute (ESRI).
  4. Diebold, Francis X & Neumark, David & Polsky, Daniel, 1997. "Job Stability in the United States," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 206-33, April.
  5. Francesco Serti & Chiara Tomasi & Antonello Zanfei, 2007. "Exporters, Importers and Two-way Traders: the Links between Internationalization, Skills and Wages," Working Papers 0713, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2007.
  6. Krueger, Alan B, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984-1989," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 33-60, February.
  7. 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).
  8. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).
  9. Sami SAAFI, 2009. "Innovations technologiques, mobilité et demande de main-d’oeuvre qualifiée. Une analyse des industries tunisiennes (Technological innovations, mobility and skilled-labour deamnd : an analysis of t," Working Papers 206, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
  10. McKinley L. Blackburn & David E. Bloom, 1994. "Changes in the Structure of Family Income Inequality in the United States and Other Industrial Nationa During the 1980s," NBER Working Papers 4754, National Bureau of Economic Research, Inc.
  11. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc.
  12. "Kim, Kwan S.", 1997. "The Political Economy of Income Inequality in the United States," Economic Review, Hitotsubashi University, vol. 48(2), pages 113-127, April.
  13. Klaus Waelde, 1996. "Lifetime learning, biased technological change and the evolution of wages in the U.S. 1960 - 1990," Labor and Demography 9601001, EconWPA.

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