Explaining the Growing Inequality in Wages Across Skill Levels
Year: 1995
Type: article
Abstract: The views expressed in this article are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. The Federal Reserve Bank of New York provides no warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, or fitness for any particular purpose of any information contained in documents produced and provided by the Federal Reserve Bank of New York in any form or manner whatsoever. During the 1980s, the gap between the earnings of low-skilled and high-skilled workers grew substantially in the United States. Researchers have advanced a number of arguments to explain the increasing disparity. This article uses descriptive and statistical evidence to evaluate two of the most prominent arguments: increased competition from low-wage developing countries—the “trade ” argument—and technological advances favoring high-skilled workers. We also consider other proposed explanations of growing wage inequality, although in less detail. We conclude that technological change, combined with overall growth in the capital stock, is the most important factor driving the growing wage inequality between
Authors: David A. Brauer, Susan Hickok
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2153405612