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Extending the Kuznets Curve

  • Jordi Guilera

    (Universitat de Barcelona)

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.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 257.

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Length: 0 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:bar:bedcje:2011257
Contact details of provider: Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es

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  1. Lains, Pedro, 2003. "Catching up to the European core: Portuguese economic growth, 1910-1990," Explorations in Economic History, Elsevier, vol. 40(4), pages 369-386, October.
  2. Thomas Lemieux, 2008. "The changing nature of wage inequality," Journal of Population Economics, Springer, vol. 21(1), pages 21-48, January.
  3. John DiNardo & Nicole M. Fortin & Thomas Lemieux, 1995. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," NBER Working Papers 5093, National Bureau of Economic Research, Inc.
  4. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers 1580, Harvard - Institute of Economic Research.
  5. James K. Galbraith & Hyunsub Kum, 2005. "Estimating The Inequality Of Household Incomes: A Statistical Approach To The Creation Of A Dense And Consistent Global Data Set," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 115-143, 03.
  6. Pedro Lains & Ester Gomes da Silva & Jordi Guilera, 2008. "Are dictatorships more unequal? Economic growth and wage inequality during Portugal's estado novo, 1944-1974," Working Papers in Economic History wp08-08, Universidad Carlos III, Instituto Figuerola de Historia y Ciencias Sociales.
  7. Atkinson, A B, 2008. "The Changing Distribution of Earnings in OECD Countries," OUP Catalogue, Oxford University Press, number 9780199532438, March.
  8. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
  9. Thomas Piketty & Emmanuel Saez, 2006. "The Evolution of Top Incomes: A Historical and International Perspective," NBER Working Papers 11955, National Bureau of Economic Research, Inc.
  10. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
  11. Galbraith, James K., 2007. "Global inequality and global macroeconomics," Journal of Policy Modeling, Elsevier, vol. 29(4), pages 587-607.
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