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Extending the Kuznets Curve

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  • Jordi Guilera

    (Universitat de Barcelona)

Abstract

Recent decades have been characterized by a steep increase in wage inequality globally. In order to explain this phenomenon, this paper extends the classic Kuznets Curve to include post-industrial economies. According to this Extended Kuznets Curve (EKC) hypothesis, wage inequality may follow an N-curve. If the inverted U-shape of the EKC is attributable to the structural changes associated with industrialization, its right-hand side reflects the boom in human capital formation registered in modern and post-industrial economies. Thus, the main candidates to explain the recent upsurge in wage inequality, namely skill-biased technical change, globalisation and institutional factors, may be embodied in the evolution of the skill composition of the labour force. The available empirical evidence, albeit limited, tends to support the EKC hypothesis.

Suggested Citation

  • Jordi Guilera, 2011. "Extending the Kuznets Curve," Working Papers in Economics 257, Universitat de Barcelona. Espai de Recerca en Economia.
    • Handle: RePEc:bar:bedcje:2011257
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    References listed on IDEAS

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    1. Kuznets in a post-industrial world
      by Economic Logician in Economic Logic on 2011-07-27 20:05:00

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    Cited by:

    1. David Castells-Quintana & Raul Ramos & Vicente Royuela, 2015. "Income inequality in European Regions: Recent trends and determinants," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 35(2), pages 123-146, October.

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    More about this item

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N34 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: 1913-
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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