The changing nature of wage inequality

The paper reviews recent developments in the literature on wage inequality with a particular focus on why inequality growth has been particularly concentrated in the top end of the wage distribution over the last 15 years. Several possible institutional and demand-side explanations are discussed for the secular growth in wage inequality in the United States and other advanced industrialized countries.

Worker-firm matching and the parenthood pay gap: Evidence from linked employer-employee data

The parenthood pay gap is not fully explained by human capital depreciation and unobserved heterogeneity. Endogenous worker-firm matching could also account for such wage differences. This hypothesis is tested thanks to linked employer-employee data on the French private sector between 1995 and 2011. Childbirth penalties are estimated for women and for men from hourly wage equations including firm- and worker-fixed effects on top of usual measures of human capital. Though worker-firm matching explains none of the motherhood wage penalty, it plays a role in the case of fathers who do not experience any wage loss after childbirth, but do not enjoy any premium either; there is evidence of an erosion of this premium since the end of the 1990s. In a counterfactual where women do not incur any penalty after childbirth, the gender gap still amounts to 2/3 of the one that currently prevails.     

The categorical generation of organizational inequality: A comparative test of Tilly's durable inequality

This paper develops a theoretical and methodological application of Tilly's [Tilly, C. (1998). Durable inequality. Berkeley, CA: University of California Press] assertions that inequalities are inherently relational and categorical. We focus on the specific proposition that inequalities are exaggerated when categorical social distinctions are mapped onto positional distinctions internal to organizations. Using samples of Australian and U.S. organizations we examine the influence of sex and other status distinctions upon between-class wage inequality. In both countries class inequality is exaggerated when workers are women and managers men. These between-class inequality producing processes are also present for other categorical distinctions available in the data we use (education, permanent vs. temporary worker, dominant vs. marginal linguistic group in Australia, permanent vs. temporary worker and white vs. non-white in the U.S.). In the U.S. the coefficients for relational sex composition are twice as large as in Australia, suggesting historical–institutional differences between the countries enables gender to exert a stronger influence on between-class inequality in the U.S. We further examine the institutional differences in these categorical bases for inequality by examining the extent to which they vary within the two countries as a function of two historically relevant institutional distinctions in wage setting regimes—formalization in the U.S. and centralized wage awards in Australia. As expected these institutional differences shape the extent and type of between-class wage inequality. We conclude that researchers should move methodologically towards observing relations within organizations to reflect the theoretical advances of the past two decades.     

Explaining levels of within-group wage inequality in U.S. labor markets

Most research on earnings inequality has focused on the growing gap between workers of different races and at different education, age, and income levels, but a large portion of the increasing inequality has actually occurred within these groups. This article focuses on the extent and sources of "within-group" wage inequality in more than 500 labor markets in the United States in 1990. In addition to documenting that within-group wage inequality across regions varies more widely today than over the past several decades, the analysis reveals that two frequently cited explanations of rising wage inequality over time have little impact on within-group wage inequality when measured at the local labor market level: (1) industrial shifts and (2) increased technology and trade. By contrast, flexible and insecure employment conditions (e.g., unemployment, contingent work, and immigration) are associated strongly with high local levels of within-group wage inequality, especially among women.     

Growth in family income inequality, 1970–1990: Industrial restructuring and demographic change

Industrial restructuring and changing population composition frequently have been treated as competing explanations of growing U.S. income inequality. Using the Gini coefficient, we employ a model of conditional change to explore the relative effects of each on changes of family income distribution between 1970 and 1990, across 784 metropolitan areas and public use microdata areas (PUMAs). Changes in both industrial structure and population characteristics are found to have significant and opposite effects on family income distribution, although there are sharp differences by decade in the dynamics that underlie increasing inequality. Our central conclusion is that it is too soon to eliminate deindustrialization as a significant cause of increased earnings inequality.     

Immigration and males' earnings inequality in the regions of the United States

In this paper I investigate the impact of recent immigration on males' earnings distributions in the major regions of the United States. I use six counterfactual scenarios to describe alternative regional skill distributions and wage structures for the population of natives and long-term immigrants in the absence of recent immigration. I find that immigration over the last three decades can account for a substantial portion of the variation in inequality across the regions. Recent immigration has contributed moderately to national growth in males' earnings inequality, primarily by changing the composition of the population.     

Fringe benefits and income inequality

In this paper, we analyze the distribution of fringe benefits among workers and underline its implications for income inequality. To this end, we develop a positional approach to inequality based on the concept of rent as a potential link between positions and their rewards. We hypothesize that workers extract rent in the form of benefits in industries with worker leverage (in the form of unioniziation, internal labor market, and public employment) or share rent with firms in highly profitable industries that endure for efficiency wage reasons. On the basis of a unique dataset from Israel, we test these hypotheses by estimating the probabilities of obtaining benefits according to industries’ structural features while controlling for cross-industrial differences in workers’ demographic and human capital characteristics. The analyses reveal that benefits are determined by structural factors, representing a separate dimension of the rewards attached to positions, different from earnings. We further stress the importance of incorporating fringe benefits into inequality research, given that benefits together with earnings stratify workers and evidently signify structured positions in the economy.     

Running hard and falling behind: a welfare analysis of two-earner families

This paper investigates the commonly asserted proposition that long term economic changes have put the family in a financial bind. Structural parameters of a family utility model are obtained by estimating simultaneous labor supply functions for a two-earner household. We find evidence indicating that the average 1990‘s two-earner family would prefer to receive the 1980‘s real wage package (were it available) instead of the real wage package it actually faces. The degree to which the 1990‘s family is worse off (in terms of the changes in the real wage package) is roughly equivalent to an hour of leisure per week. Received September 25, 1995 / Accepted February 5, 1997     

Work and pay in flexible and regulated labor markets: A generalized perspective on institutional evolution and inequality trends in Europe and the U.S.

In recent years a “unified theory” has emerged out of labor economics, which argues that a combination of “macroeconomic shocks” and flexible labor market institutions in the U.S. has produced strong upward trends in wage inequality, while these same shocks have produced high unemployment and low employment growth in Europe as a side effect of the wage stability preserved by that continent's rigid labor market institutions. This paper takes issue with the common view that inequality trends are best explained by a model of stable institutions interacting with changing macroeconomic forces. It argues that European institutions in fact have changed, and that institutional changes which were triggered by the broader macroeconomic forces have affected the form as well as the size of inequality trends. While the U.S. has experienced rising strong skill-based wage inequality, institutional change in France has produced an upward trend in the density of insecure jobs and an increased concentration of low-skill workers in insecure jobs. These results challenge the view that low employment rates is the sole mechanism through which European labor markets have absorbed asymmetric shocks to their demand for labor.     

Social class and workers’ rent, 1983–2001

Sociologists and economists continue to seek explanations for the growth of earnings inequality since the late 1970s. In this article, we draw upon the structural tradition of labor market analysis in sociology in order evaluate the conjecture that selective rent destruction is a source of the recent increase in earnings inequality. In empirical analysis of the Outgoing Rotation Groups of the Current Population Surveys from 1983 to 2001, we demonstrate that (1) the earnings of workers at the bottom of the class distribution have declined relative to the earnings of those at the top and (2) the variance of wage premia associated with employment in alternative industries has declined relatively more for those at the bottom of the class distribution. Adopting the position from both the sociology and labor economics literatures that these industry wage premia are reasonable measures of industry rents, we conclude that the results support the rent destruction conjecture and, by implication, that structural models of labor markets can explain some of the increase in earnings inequality.     

Are Educational Mismatches Responsible for the ‘Inequality Increasing Effect’ of Education?

This paper asks whether educational mismatches can account for the positive association between education and wage inequality found in the data. We use two different data sources, the European Community Household Panel and the Portuguese Labour Force Survey, and consider several types of mismatch, including overqualification, underqualification and skills mismatch. We test our hypothesis using two different measurement methods, the ‘statistical’ and the ‘subjective’ approach. The results are robust to the different choices and unambiguously show that the positive effect of education on wage inequality is not due to the prevalence of educational mismatches in the labour market.     

The gender wage gap and wage arrears in Russia: Evidence from the RLMS

This paper re-examines the gender wage gap in Russia between 1994 and 1998 taking into account the pervasiveness of Russias non-payment institutions. Using censored regression techniques we investigate wage discrimination at different sections of the income distribution and for various important sub-groups. We find that the wage gap is distributed unevenly. Most notably, women at the lower end of the income distribution suffer the highest degree of discrimination. However, we find that wage arrears and payment in-kind attenuated wage discrimination, particularly amongst the lowest paid workers, suggesting that Russian enterprise managers assigned importance to equity considerations when allocating these forms of non-payment.All correspondence to Carmen A Li. We are grateful for the helpful comments and suggestions of Vanessa Fry, Amanda Gosling, Tim Hatton, Alastair McAuley and two anonymous referees. The usual disclaimer applies. Responsible editor: Junsen Zhang.     

Changes in inequality and unemployment over the 1980s: comparative cross-national responses

This paper reviews the research evidence regarding high and persistent unemployment in the western European nations and widening inequality in the United States and selected European countries. It has been suggested that both of these problems are due to fundamental economic shifts in labor demand within the more industrialized world that have led to declines in the demand for less skilled workers: The effect on countries with more regulated labor markets was rising unemployment, while in less regulated labor markets it was rising wage inequality. The paper considers the evidence for this hypothesis, as well as the research questions and policy issues that it raises.The author thanks Rebecca London and Leslie Moscow for research assistance.     

数字经济时代资本三大构成变化及其对劳动报酬占比的影响

近年来,在以互联网、大数据、人工智能为核心生产要素和以创新驱动为战略支撑的数字经济逐步上升为国家战略的过程中,中国经济增长和劳动生产率提高颇为显著,资本技术构成始终保持稳步上升,而资本有机构成与资本价值构成出现了新的变化,均呈现波动式下降。劳动报酬占比在国民收入分配格局中长期处于低水平稳定且增长缓慢状态,如何提高劳动报酬占比越来越成为经济高质量发展的瓶颈。理论分析资本三大构成与劳动报酬占比的关系,并在此基础上就数字经济时代我国资本三大构成新变化对劳动报酬占比的影响进行研究发现,资本技术构成受到劳动生产率与就业数量的影响进而影响劳动报酬占比;资本价值构成对劳动报酬占比的影响与工资水平密切相关;资本有机构成随着经济发展水平的变化对劳动报酬占比的影响也会出现差异,因此需在提高劳动生产率的同时结合三大产业吸纳就业的特征,制定精准的差异化就业政策;形成中间大两头小的橄榄型分配结构,扩大中等收入群体比重并增加低收入群体报酬;探索物质生产资料和精神生产资料"双重"所有制结构变革,结合资本有机构成变化特点合理分配劳动与资本两要素;促进公共服务均等化,加大普惠性人力资本投入,在经济高质量发展中促进共同富...     

Wage Inequality and Wage Mobility in Turkey

Social Indicators Research - This paper investigates wage inequality and wage mobility in Turkey using the surveys on income and living conditions. Providing the first evidence on wage mobility for...     

Women in the workforce and family structure in Australia

The purpose of this paper is to set out some of the changes that have taken place in the economic status of women in Australia and to discuss the relationship between economic factors and family structure. I look at the position of women in the workforce and examine some of the possible explanations for the increase in female participation. These include the increase in the female wage, demographic changes and changes in the industrial composition of the economy. In a final section, I examine some of the evidence for the effect of economic variables, particularly the wage, on fertility. I would like to thank Bob Gregory, Bruce Chapman, George Fane, Francis Teal and the Journal’s referees for valuable comments on an earlier draft. All responsibility for remaining errors is mine.     

基于二阶段嵌套锡尔系数的人口分布的差异研究

文章首先提出了人口分布锡尔系数的概念及其一阶、二阶分解方法,接着以江苏省为研究区域,基于三大地带（苏南、苏中和苏北）、13个地级市、106个县（县级市、市辖区）三级结构的地域行政单元,分别运用一次、二次分解对全省的人口分布的区域差异进行细分测度．将江苏省人口分布的差异性分解为苏南、苏中、苏北三大地带闯的差异、三大地带内地级市之间的差异以及各地级市的内部差异三部分。其主要结论为：以地级市为计算单元的一阶段分解结果显示．苏南、苏中和苏北三个地带间人口分布的差异性是造成一阶段分解的全省人口分布差异的主要原因;以县级行政单元的二阶段分解结果表明．地级市内部的差异是江苏省人口分布的整体差异的主要构成部分;通过运用局部G统计量对各县级单元人口分布的热点探测发现,“热点”地区的人口分布差异性大．“冷点”地区的差异性小．     

中国城镇家庭户收入和财产不平等:1995～2002

利用中国家庭户收入调查收集的1995年和2002年城镇家庭户样本数据,以家庭户作为分析单位,对中国城镇收入和财产不平等进行了考察。数据分析结果表明:中国城镇家庭户收入的大多数不平等测量指标在1995～2002年7年间都存在一个显著的大幅度上升,但家庭户财产不平等在此期间呈现出略有下降的趋势;基于人口分组的分解反映出,区域、户主受教育程度和户主中共党员身份对总的家庭收入和财产不平等具有更大的贡献;总体上,对于1995～2002年的中国城镇而言,分类机制在左右家庭户资源不平等变动中扮演着更为重要的角色。     

Technological progress, income inequality, and fertility

This paper constructs an overlapping-generations model with two different types of technology: modern, which can be accessed only by the skilled, and traditional, which can be accessed by the unskilled. The model described in this paper shows that a rise in the wage premium for skilled workers caused by skill-biased technological changes explains the following key stylized facts: with economic development, the fraction of skilled people increases, the fertility rate declines, and income inequality rises and then falls. The model also explains the observed gradual rises in income inequality in developed countries.      

Multidimensional Racial Inequality in the United States

This paper measures racial inequalities in the US using a multidimensional ‘wellbeing’ approach that simultaneously considers the distributions of income, health and education. The primary objective is to examine trends in US wellbeing inequality with an emphasis on changes in racial composition. Data is taken from 1990 to 2007 and we observe increases in income inequality, a decline in education inequality and unchanged health inequality over the period. Taken together, these results show a slight increase in the dispersion in multidimensional wellbeing. Stratifying by racial groups shows that this increase is due to widening intra-racial inequalities while inter-racial differences remained unchanged. The method is also used to evaluate wellbeing across groups and we estimate black wellbeing to average around 76 % of whites, while persons from other races average approximately 93 %. Some other changes in composition occur through time and the results are shown to be robust to a number of changes in parametric weightings.