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International Differences in Male Wage Inequality: Institutions versus Market Forces

  • Blau, Francine D
  • Kahn, Lawrence M

This paper studies the considerably higher level of wage inequality in the United States than in nine other OECD countries. The authors find that the greater overall U.S. wage dispersion primarily reflects substantially more compression at the bottom of the wage distribution in the other countries. While differences in the distribution of measured characteristics help to explain some aspects of the international differences, higher U.S. prices (i.e., rewards to skills and rents) are an important factor. Labor market institutions, chiefly the relatively decentralized wage-setting mechanisms in the United States, provide the most persuasive explanation for these patterns. Copyright 1996 by University of Chicago Press.

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File URL: http://dx.doi.org/10.1086/262043
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Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 104 (1996)
Issue (Month): 4 (August)
Pages: 791-836

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Handle: RePEc:ucp:jpolec:v:104:y:1996:i:4:p:791-836
Contact details of provider: Web page: http://www.journals.uchicago.edu/JPE/

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  1. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
  2. Chamberlain, G., 1991. "Quantile Regression, Censoring, And The Structure Of Wages," Harvard Institute of Economic Research Working Papers 1558, Harvard - Institute of Economic Research.
  3. Harry C. Katz, 1993. "The Decentralization of Collective Bargaining: A Literature Review and Comparative Analysis," ILR Review, Cornell University, ILR School, vol. 47(1), pages 3-22, October.
  4. Richard B. Freeman, 1982. "Union wage practices and wage dispersion within establishments," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(1), pages 3-21, October.
  5. Wallace Hendricks & Larry M. Kahn, 1982. "The determinants of bargaining structure in U.S. manufacturing industries," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 35(2), pages 181-195, January.
  6. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-38, May.
  7. Richard B. Freeman, 1980. "Unionism and the Dispersion of Wages," ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
  8. Steven J. Davis, 1992. "Cross-Country Patterns of Change in Relative Wages," NBER Working Papers 4085, National Bureau of Economic Research, Inc.
  9. Erica L. Groshen, 1987. "The structure of the female/male wage differential: is it who you are, what you do, or where you work?," Working Paper 8708, Federal Reserve Bank of Cleveland.
  10. Harry C. Katz, 1993. "The decentralization of collective bargaining: A literature review and comparative analysis," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(1), pages 3-22, October.
  11. Kahn, Lawrence M & Curme, Michael, 1987. "Unions and Nonunion Wage Dispersion," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 600-607, November.
  12. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
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