INEQUALITY OF WAGE RATES,EARNINGS AND FAMILY INCOME IN THE UNITED STATES, 1975–2002

This paper analyzes distributional changes over the last quarter of the twentieth century. We focus on four distinct distributions: the distribution of hourly wage rates, the distribution of annual earnings of individuals, the distribution of annual earnings of families, and the distribution of total family income adjusted for family size. Both male wage rate inequality and family income inequality accelerated during the early 1980s, increased at a slower rate through the early 1990s and then stabilized at a high level through the early 2000s. The similarity in the timing of changes in these two distributions has been used as evidence that increased family income inequality primarily reflects increased inequality of wage rates. We show that other important factors were also at work.     

TRENDS IN LONG-RUN VERSUS CROSS-SECTION EARNINGS INEQUALITY IN THE 1970s AND 1980s

This paper uses the PSID to assess the changes in earnings mobility and to compare the changes in cross-section and long-run inequality in the 1970s and 1980s. Previous inequality studies have primarily used measures of cross-section inequality. However, long-run inequality depends not only on cross-section inequality, but also on the degree of earnings mobility, which equalizes earnings over time. I find that earnings mobility increased during the 1970s, but fell during the 1980s. Consistent with this result, the increase in cross-section inequality overstated the true increase during the 1970s, but understated the true increase in inequality during the 1980s.     

THE GROWTH OF FAMILY EARNINGS INEQUALITY IN CANADA, 1980–2005

In this study we document recent trends in family earnings inequality using data from the Canadian Census and provide insight into the various factors that drive changes in the family earnings distribution. Over the period 1980–95 we observe substantial increases in family earnings inequality. In contrast, we find that some decrease in inequality occurred over the period 1995–2005 although the earnings of the richest 1 percent of families increased substantially. We use semi‐parametric decomposition methods to show that increases in the employment rates of men and women, increases in their educational attainment, and decreases in assortative mating tended to have equalizing effects on the family earnings distribution. We also show that increases in the returns to higher education and increases in the proportion of single individuals as well as lone‐parent families drove increases in family earnings inequality.     

EARNJNGS INEQUALITY IN PORTUGAL: HIGH AND RISING?

The level of earnings inequality and its change during the 1980s in Portugal are analyzed, relying on several inequality measures and on international comparisons to generate insight into their patterns. A high level of inequality at the beginning of the eighties is detected, together with a pronounced rise in wage dispersion, brought about by growing inequality at the top. Changes taking place within economic activities, possibly technical progress, are the main forces driving these changes in the wage pattern, while demographic forces, as well as international trade, which could have generated shifts in the demand for labor across economic activities, should be dismissed as explanations for the rise in labor market inequality in Portugal from 1983 to 1992.     

GENDER EARNINGS DIFFERENTIALS AND REGIONAL ECONOMIC DEVELOPMENT IN URBAN CHINA, 1988–97

Gender earnings differentials in urban China by region and their changes during the first decade of economic reform are examined. It is found that the female–male earnings ratio increased during the early stage of reform. The male earnings premium, overall, showed an increasing trend in the later stage of reform. Decomposition of the gender earnings differential reveals that a relatively lower percentage of the differential could be explained by gender differences in productive characteristics in the fast growing regions and in regions with a rapid pace of reform. The cross-sectional results highlight the possible existence of gender discrimination, particularly in the later stages of economic reform and development. Both market competition and the effects of wage decentralization play a role in shaping the gender earnings differentials. Gender earnings differentials varied by region and over time, generally in tandem with the pace of economic reform and development. The decomposition of the over time changes in the earnings gap indicated that improvement in the productive characteristics of females during the reform period constantly enhanced the earnings of females relative to those of males. The changes over time in the return to female characteristics, however, work to counter any narrowing of the gender earnings gap.     

Creative Destruction and the Rise of Inequality

Common wisdom interprets the rise in inequality of the last two decades as the result of a skill-biased labor demand shift. This explanation does not account for two important observations: (i) within-group inequality has also markedly risen, and (ii) the rise of inequality has been accompanied by a rise of the volatility of earnings. This paper argues that a dual labor market structure, where some workers are paid efficiency-wages can account for the empirical regularities, in the absence of skilled biased technological change. The analysis demonstrates that an unbiased innovation, as well as North–South trade, can contribute to the efficiency wage premium, and thus to wage inequality, by increasing labor turnover.     

FORCES SHAPING CHINA'S INTERPROVINCIAL INEQUALITY

This paper explores the forces that shaped China's interprovincial inequality in the last five decades of Communist rule. In so far as the change in interprovincial inequality is the result of differential growth in provincial GDP per capita and provincial economic growth, it may be decomposed into contributions by total factor productivity (TFP) and other factor inputs. A new method is introduced to make this decomposition. Care is exercised in taking into account problems of Chinese official data when implementing the decomposition analysis. The findings suggest that TFP and factor inputs exerted different and sometimes opposing effects on interprovincial inequality in the Maoist and reform era. The increase in inequality from the mid 1960s to the mid 1970s is due to the contribution of TFP overwhelming that of physical capital. The opposite is true for the 1980s. The increase in the 1990s is mainly driven by the skewed distribution of investments in favor of the richer coastal provinces reinforced by the increasing contribution of TFP.     

INTERNATIONAL COMPARISONS OF EARNINGS INEQUALITY FOR MEN IN THE 1980s

In this paper we present a comparative analysis of earnings inequality during the 1980s among prime age men who headed households and worked year-round, full-time from five industrialized countries-Canada, Sweden, Australia, West Germany, and the United States. The data were obtained from the Luxembourg Income Study (LIS) database, a multinational collection of microdata sets from various countries which have been assembled for the primary purpose of making cross-national comparisons of economic and social well-being. The results of the comparison indicated that during the mid-1980s, the United States had the most unequal distribution of earnings and Sweden the least unequal. Between the early 1980s and mid-1980s, however, the earnings distributions in all five countries showed evidence of becoming more unequal, especially in the United States, Canada, and Sweden.     

EARNINGS INEQUALITY, LABOUR SUPPLY AND SCHOOLING IN HUSBAND–WIFE FAMILIES

This paper describes the association between market work and earnings inequality across families over the life cycle and over calendar time with special attention to the different experiences of college‐educated and high‐school‐educated people. A concise and effective accounting framework is developed that allows for an assessment of the effect of the growing market employment of married women on family earnings inequality. Applying this framework to pseudo‐panel data from successive Current Population Surveys indicates that the increase in wives' employment has diminished the growth in family earnings inequality especially for well‐educated couples. Inferences about the level and change in earnings inequality depend on the degree of labor market attachment of the people studied especially in the case of wives.     

MEASURING EARNINGS INEQUALITY: AN ECONOMIC ANALYSIS OF THE BONFERRONI INDEX

This paper studies the economic content of the Bonferroni index. The most remarkable property of the Bonferroni index is that it overweights income transfers among the poor, and the weights are higher the lower the transfers occur on the income distribution. Hence, it is a good measure of inequality when changes in the living standards of the poor are concerned. There are many problems—especially in labor economics—that fall into this category. Using a version of the assignment model, we show that the Bonferroni index can be formulated endogenously within a mechanism featuring efficient assignment of workers to firms. This formulation is useful in evaluating the interactions between the distribution of skills and earnings inequality with a special emphasis on the lower tail of the earnings distribution. Moreover, it allows us to think about earnings inequality by separately analyzing the contribution of each economic parameter.     

OCCUPATIONAL EARNINGS BEHAVIOR AND THE INEQUALITY OF EARNINGS BY SEX AND RACE IN THE UNITED STATES*

This paper examines differences in earnings by occupations, and within occupations by sex and by race, on the basis of the 1/100 Public Use Samples of the 1960 and 1970 U.S. Population Censuses. It employs interval analysis to establish 32 categories of occupations with similar characteristics. Little relation was found between mean earnings of occupational groups and the degree of earnings inequality within them. When the figures are examined by sex, it was found that men, on average, earned over twice as much as women in both years, but women's earnings were more unequally distributed (as measured by the Gini coefficient). Women are concentrated in the traditional “female” occupations, which tend to be those at the bottom of the earnings scale, and men have a monopoly of the higher paid occupations. But mean earnings for men exceeded those for women in all occupational groups except one, even in the primarily female occupations. Standardizing first for occupational distribution and then for earnings by occupation, it was found that earnings differences between males and females within occupation had a greater impact on the overall male-female earnings ratio than did differences in occupational distribution by sex. In contrast, when the figures are examined by race, the change in occupational distribution (primarily the movement of blacks out of farming and of blacks and Spanish speakers out of personal services) was the major factor. There was also a considerable degree of earnings inequality within demographic groups. The degree of inequality was in the main reduced when the demographic groups were subdivided into occupations, but it was still substantial. Additional factors like time worked, schooling, and experience must be taken into consideration in understanding this phenomenon.     

Factor Components of Inequality: A Cross‐Country Study

This paper uses data from the Luxembourg Income Study to examine some of the forces that have driven changes in household income inequality over the last three decades of the twentieth century. We decompose inequality for six countries (Canada, Germany, Norway, Sweden, the U.K., and the U.S.) into the three sources of market income (earnings, property income, and income from self‐employment) and taxes and transfers. Our findings indicate that although changes in the distribution of earnings are an important force behind recent trends, they are not the only one. Greater earnings dispersion has in some cases been accompanied by a reduction in the share of earnings which dampened its impact on overall household income inequality. In some countries the contribution of self‐employment income to inequality has been on the rise, while in others, increases in inequality in capital income account for a substantial fraction of the observed distributional changes.     

Wage premium of Communist Party membership: Evidence from China

Social status and political connections may confer large economic benefits on an individual. Previous studies focused on China have examined the relationship between Communist Party membership and earnings and have revealed a positive correlation. However, the correlation could be partly or totally spurious. Using data from three surveys spanning three decades, we estimate the causal effect of Chinese Communist Party membership on monthly earnings in China. We find that, on average, membership in the Communist Party of China increases monthly earnings and the wage premium has grown in the last three decades. We explore potential causes and discover evidence that improvements in social networks and social rank, acquisition of job‐related qualifications and greater life satisfaction play important roles in increased earnings.     

WAGE MOBILITY AND WAGE INEQUALITY AMONG YOUNG WORKERS

This analysis uses data from the National Longitudinal Surveys to examine wage inequality and wage mobility within the wage distribution for young high school graduates during their early years in the labor market. The analysis constructs a new index that facilitates measuring mobility changes over time. The data indicate that no strong relationship exists between wage mobility and wage inequality for young workers. Controlling for time invariant differences between individuals also indicates that between the 1970s and 1980s factors that impact mobility underwent very few changes .     

IMMIGRATION, POPULATION HETEROGENEITY, AND EARNINGS INEQUALITY IN HONG KONG

This paper analyzes the heterogeneity effect of immigration on earnings in-equality by decomposing the aggregate measure of total inequality. The analysis shows that a substantial portion of an increase in measured inequality could be due to shifts in shares of heterogeneous population groups caused by immigration policy rather than by widening earnings dispersion within these groups. The analysis is illustrated with census data of Hong Kong from 1981 to 1991. Income redistribution policy based on measured total inequality when there are shifts in population shares could be misguided.     

国有单位工资结构及其就业规模变化的收入分配效应:1988—2007

本文使用1988年、1995年、2002年、2007年CHIP城镇入户调查数据考察国有单位工资结构及其就业规模变化的收入分配效应。为此,本文采用了分位数回归方法、以多重分位数回归为基础的Machado&Mata(2005)反事实分解方法及作者扩展了的方法。各结果表明:国有企业就业份额大幅度下降导致中国城镇工资收入差距显著下降;然而国有企业减员增效改革完成以后,国有企业工资高于非国有企业的幅度及其不合理部分大幅度上升,其结果是城镇工资收入差距扩大。     

互联网使用与工资收入差距*——基于CHNS数据的经验分析

基于2004—2011年的中国营养与健康调查数据（CHNS）,本文使用最小二乘法和控制自选择偏差的倾向性得分匹配法详细估计了互联网使用对工资收入的影响。结果表明,互联网使用对个体工资收入有积极的影响,尤其对于拥有高中学历的个体而言,这种影响更大。本文进一步使用基于RIF回归的FFL分解方法考察了互联网使用对工资不平等的影响。本文发现,2004—2011年间互联网使用比例的增加降低了整体工资不平等,且使用过互联网的高中学历人员比例增加有助于降低高工资与中等工资收入人群的工资差距。同时,互联网使用收益率的下降也有助于降低工资不平等,尤其有助于降低高工资与中等工资收入人群之间的工资差距。因此,普及互联网使用,尤其是提高低收入群体的互联网使用比例和普及该群体的高中阶段教育对于抑制不平等的扩大有重要的意义。     

经济转型下的中国城镇女性就业、收入及其对家庭收入不平等的影响

本文利用1988、1995和2002年的中国城镇家庭收入调查数据,旨在比较改革的渐进期(1988—1995年)和深化期(1995—2002年),城镇已婚女性的就业和就业收入对家庭收入差距的影响。我们发现在两个时期,已婚女性的就业明显下降,其就业收入都起到了缩小家庭收入差距的作用。在改革渐进期,已婚女性就业收入缩小家庭收入差距的作用不断加强;而在改革深化期这一作用是下降的。和改革渐进期相比,已婚女性就业收入的变化在改革深化期成为了缩小家庭收入差距的重要原因。     

Cross-sectional facts for macroeconomists

This article provides an introduction to the special issue of the Review of Economic Dynamics on “Cross-Sectional Facts for Macroeconomists”. The issue documents, for nine countries, the level and the evolution, over time and over the life cycle, of several dimensions of economic inequality, including wages, labor earnings, income, consumption, and wealth. After describing the motivation and the common methodology underlying this empirical project, we discuss selected results, with an emphasis on cross-country comparisons. Most, but not all, countries experienced substantial increases in wages and earnings inequality, over the last three decades. While the trend in the skill premium differed widely across countries, the experience premium rose and the gender premium fell virtually everywhere. At a higher frequency, earnings inequality appears to be strongly counter-cyclical. In all countries, government redistribution through taxes and transfers reduced the level, the trend and the cyclical fluctuations in income inequality. The rise in income inequality was stronger at the bottom of the distribution. Consumption inequality increased less than disposable income inequality, and tracked the latter much more closely at the top than at the bottom of the distribution. Measuring the age-profile of inequality is challenging because of the interplay of time and cohort effects.     

The Manufacturing Wage Inequality in Latin America and East Asia: Openness, Technology Transfer, and Labor Supply

This paper examines wage inequality in the manufacturing sector for a panel of Latin American and East Asian economies during the last three decades. A labor supply and demand model is presented where three main determinants of wage inequality are investigated: trade openness, technology transfer, and labor supply. Findings indicate that wage inequality in the two regions has responded differently to the various determinants enumerated above. Some lessons from the comparative experience of the two regions are drawn.