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Differences in Learning and Inequality

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    Abstract

    Rapid growth in productivity combined with increasing wage dispersion in some countries, notably Anglo-Saxon, has been the subject of numerous studies. The main hypothesis in the literature is that an increased skill premium provides a link between productivity growth and inequality. If this view is correct it poses some challenges for policies that focus on promoting a learning economy. However, data for many OECD-countries show that increased wage dispersion is not a common feature. Many countries have enjoyed a fairly stable or even declining dispersion of wages. Also in countries where the production and use of ITC-goods are significant, there are hardly any changes in wage dispersion. Thus one must look at a broader set of factors other than skilled biased technical change in order to explain the diverse picture of changes in inequality. This paper points to changes in educational attainment and institutions relating to wage bargaining as possible explanations for the varying experience wrt. wage inequality between OECD-countries in recent decades.

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    Bibliographic Info

    Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 457.

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    Date of creation: Apr 2006
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    Handle: RePEc:ssb:dispap:457

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    Keywords: Inequality; skill premium; bargaining;

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    1. Barrett, Alan & Fitz Gerald, John & Nolan, Brian, 2000. "Earnings Inequality, Returns to Education and Immigration into Ireland," CEPR Discussion Papers 2493, C.E.P.R. Discussion Papers.
    2. David G. Blanchflower & Andrew J. Oswald, 1989. "The Wage Curve," NBER Working Papers 3181, National Bureau of Economic Research, Inc.
      • Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
    3. Gordon, Robert J, 2000. "Does the 'New Economy' Measure up to the Great Inventions of the Past?," CEPR Discussion Papers 2607, C.E.P.R. Discussion Papers.
    4. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    5. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    6. Coen N. Teulings, 1998. "The Contribution of Minimum Wages to Increasing Wage Inequality," Tinbergen Institute Discussion Papers 98-093/3, Tinbergen Institute.
    7. Acemoglu, Daron & Aghion, Philippe & Violante, Giovanni L, 2001. "Deunionization, Technical Change and Inequality," CEPR Discussion Papers 2764, C.E.P.R. Discussion Papers.
    8. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
    9. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    10. Banerjee, Abhijit V & Duflo, Esther, 2003. " Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-99, September.
    11. Michael Förster & Mark Pearson, 2002. "Income Distribution and Poverty in the OECD Area: Trends and Driving Forces," OECD Economic Studies, OECD Publishing, vol. 2002(1), pages 7-38.
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