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Soft and Hard Within- and Between-Industry Changes of U.S. Skill Intensity: Shedding Light on Worker’s Inequality

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  • Grigoris Zarotiadis
  • T. Lynn Riggs

Abstract

In order to examine the worsening of inequality between workers of different skill levels over the past three decades and to further motivate the theoretical discussion on this issue, we use the decomposition methodology to focus on the interaction of within- and between-industry changes of the relative skill intensity in U.S. manufacturing. Unlike previous work, we use more detailed levels of industry classification (5-digit SIC product codes), and we analyze the impact of plants switching industries as well as of plant births and deaths on these changes. Internal, plant-level data from the U.S. Census Bureau's Longitudinal Research Database and the new Longitudinal Business Database provide us with the requisite information to conduct these studies. Finally, our empirical conclusions are discussed in relation to the inspired theoretical inference, as they enrich the debate concerning the sources of the inequality by justifying the skill-biased character of technical change.

Suggested Citation

  • Grigoris Zarotiadis & T. Lynn Riggs, 2006. "Soft and Hard Within- and Between-Industry Changes of U.S. Skill Intensity: Shedding Light on Worker’s Inequality," Working Papers 06-01, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:06-01
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    File URL: https://www2.census.gov/ces/wp/2006/CES-WP-06-01.pdf
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    References listed on IDEAS

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    1. Andrew B. Bernard & J. Bradford Jensen, 1999. "Exporting and Productivity," NBER Working Papers 7135, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bernard, Andrew B. & Redding, Stephen & Schott, Peter.K, 2006. "Multi-product firms and product switching," LSE Research Online Documents on Economics 3687, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    Skill Intensity; Skill-Biased Technical Change; Wage Inequality;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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