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Macroeconomic Conditions and Wage Inequality: Expanding and Analyzing the Worldwide Dataset

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  • Saiah Lee

    (Ulsan National Institute of Science and Technology (UNIST), Republic of Korea)

Abstract

This paper introduces a comprehensive dataset examining wage inequality and returns to education across 40 countries, revisiting earlier studies on the effects of economic development, trade openness, and returns to skill on wage inequality. Our findings include: (i) the presence of Kuznets' "inverted U-curve" in wage inequality data, (ii) a positive relationship between trade openness and both wage inequality and returns to education, (iii) a positive relationship between levels of wage inequality and levels of return to education, and (iv) an intriguing phenomenon where accelerated skill-biased technological change leads to a deceleration of the wage gap widening process, as evidenced by the negative relationship between changes in wage inequality and changes in returns to education.

Suggested Citation

  • Saiah Lee, 2023. "Macroeconomic Conditions and Wage Inequality: Expanding and Analyzing the Worldwide Dataset," Annals of Economics and Finance, Society for AEF, vol. 24(2), pages 329-362, November.
    • Handle: RePEc:cuf:journl:y:2023:v:24:i:2:lee
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    More about this item

    Keywords

    Wage inequality; Kuznets curve; Trade openness; Skill-biased technological change;
    All these keywords.

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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