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Decomposing the education wage gap: everything but the kitchen sink

  • Julie L. Hotchkiss
  • Menbere Shiferaw

This paper contributes to a large literature concerned with identifying the source of the widening wage gap between high school and college graduates by providing a comprehensive, multidimensional decomposition of wages across both time and educational status. Data from a multitude of sources are brought to bear on the question of the relative importance of labor market supply and demand factors in the determination of those wage differences. The results confirm the importance of investments in and use of technology, which has been the focus of most of the previous literature, but are also able to show that demand and supply factors played very different roles in the growing wage gaps of the 1980s and 1990s.

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File URL: http://www.frbatlanta.org/documents/pubs/wp/wp1012.pdf
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Paper provided by Federal Reserve Bank of Atlanta in its series Working Paper with number 2010-12.

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Date of creation: 2010
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Handle: RePEc:fip:fedawp:2010-12
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  1. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
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  3. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
  4. Ben Jann, 2008. "The Blinder–Oaxaca decomposition for linear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 453-479, December.
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  7. Peter C.B. Phillips & Joon Y. Park, 1986. "On the Formulation of Wald Tests of Nonlinear Restrictions," Cowles Foundation Discussion Papers 801, Cowles Foundation for Research in Economics, Yale University.
  8. Daniel Fernandez Kranz, 2006. "Why has wage inequality increased more in the USA than in Europe? An empirical investigation of the demand and supply of skill," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 771-788.
  9. Hirsch, Boris & König, Marion & Möller, Joachim, 2009. "Is There a Gap in the Gap? Regional Differences in the Gender Pay Gap," IZA Discussion Papers 4231, Institute for the Study of Labor (IZA).
  10. Julie L. Hotchkiss & M. Melinda Pitts & John C. Robertson, 2006. "The push-pull effects of the information technology boom and bust: insight from matched employer-employee data," Working Paper 2006-01, Federal Reserve Bank of Atlanta.
  11. Hirsch, Barry, 2004. "Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills," IZA Discussion Papers 1261, Institute for the Study of Labor (IZA).
  12. Ben Jann, 2008. "A Stata implementation of the Blinder-Oaxaca decomposition," ETH Zurich Sociology Working Papers 5, ETH Zurich, Chair of Sociology, revised 14 May 2008.
  13. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," NBER Working Papers 11986, National Bureau of Economic Research, Inc.
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  17. Dan Black & Natalia Kolesnikova & Lowell J. Taylor, 2007. "Earnings functions when wages and prices vary by location," Working Papers 2007-031, Federal Reserve Bank of St. Louis.
  18. Crifo, Patricia, 2008. "Skill supply and biased technical change," Labour Economics, Elsevier, vol. 15(5), pages 812-830, October.
  19. Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
  20. Autor, David & Dorn, David, 2009. "Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States," IZA Discussion Papers 4290, Institute for the Study of Labor (IZA).
  21. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, March.
  22. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality In The United States, 1913-1998," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 1-39, February.
  23. Christopher H. Wheeler, 2005. "Evidence on wage inequality, worker education, and technology," Review, Federal Reserve Bank of St. Louis, issue May, pages 375-393.
  24. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
  25. Julie L. Hotchkiss & M. Melinda Pitts & Mary Beth Walker, 2010. "Assessing the impact of education and marriage on labor market exit decisions of women," Working Paper 2010-02, Federal Reserve Bank of Atlanta.
  26. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
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