Earnings Inequality within and Between Levels of Responsibility in Engineering

Responsibility is a scarce resource--we can't all be chiefs. This paper studies how responsibility was allocated among engineers between 1961 and 1986 using the Current Population Survey and a Bureau of Labor Statistics salary survey that classifies workers by level within their firm. The percentage of engineers assigned to low levels fell until 1976 and rose thereafter. This pattern follows the distribution of experience in the profession, as measured in the CPS. Overall earnings inequality rose during two periods, the early 1970s and 1980s. Inequality within levels, however, steadily fell after 1976, so the later and sharper increase in inequality reflects a widening gap between job levels, This suggest that firms are better able to assign workers responsibility when the profession is relatively young; the match between the supply and demand of responsibility is better, Technological change biased against high level jobs does not appear to be a major factor in the changes since the mid 1970s.