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Accounting for earnings inequality in a diverse work force

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  • Mark E. Schweitzer

Abstract

A general decomposition of earnings inequality is applied to the complete full-time labor force, including minorities and women. The results confirm that education premiums were the largest observable factor in the rise in earnings inequality in the 1980s, and also reveal an offsetting reduction in the role of race- and sex-related earnings differences.

Suggested Citation

  • Mark E. Schweitzer, 1993. "Accounting for earnings inequality in a diverse work force," Working Paper 9314, Federal Reserve Bank of Cleveland.
  • Handle: RePEc:fip:fedcwp:9314
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    References listed on IDEAS

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    1. Kevin M. Murphy & Finis Welch, 1992. "The Structure of Wages," The Quarterly Journal of Economics, Oxford University Press, pages 285-326.
    2. Creedy, John, 1977. "The Principle of Transfers and the Variance of Logarithms," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, pages 153-158.
    3. Welch, Finis, 1990. "The Employment of Black Men," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 26-74, January.
    4. McKinley L. Blackburn & David E. Bloom, 1987. "The Effects of Technological Change on Earnings and Income Inequality inthe United States," NBER Working Papers 2337, National Bureau of Economic Research, Inc.
    5. Fuchs, Victor R, 1989. "Women's Quest for Economic Equality," Journal of Economic Perspectives, American Economic Association, pages 25-41.
    6. Richard B. Freeman, 1991. "How Much Has De-Unionisation Contributed to the Rise in Male Earnings Inequality?," NBER Working Papers 3826, National Bureau of Economic Research, Inc.
    7. James Heckman & Jose Scheinkman, 1987. "The Importance of Bundling in a Gorman-Lancaster Model of Earnings," Review of Economic Studies, Oxford University Press, pages 243-255.
    8. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, pages 193-211.
    9. 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, pages 1333-1381.
    10. Randall W. Eberts, 1989. "Accounting for the recent divergence in regional wage differentials," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 14-26.
    11. O'Neill, June, 1990. "The Role of Human Capital in Earnings Differences between Black and White Men," Journal of Economic Perspectives, American Economic Association, pages 25-45.
    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, pages 410-442.
    13. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, pages 281-281.
    14. Smith, James P & Welch, Finis, 1979. "Inequality: Race Differences in the Distribution of Earnings," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(2), pages 515-526, June.
    15. Smith, James P & Ward, Michael, 1989. "Women in the Labor Market and in the Family," Journal of Economic Perspectives, American Economic Association, pages 9-23.
    16. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, pages 538-538.
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    Cited by:

    1. Randall W. Eberts & Mark E. Schweitzer, 1994. "Regional wage convergence and divergence: adjusting wages for cost-of- living differences," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 26-37.

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    Keywords

    Education ; Income distribution ; Labor supply;

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