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Title: The Evolution of Wage Differences in the United States: A New Methodological Approach and New Empirical Findings
Citation Type: Miscellaneous
Publication Year: 2015
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Abstract: This essay proposes a new methodological approach to the study of wage differences. All existing approaches to the phenomenon of wage differences have failed so far to empirically address the shape of the wage distribution. The proposed new approach effectively addresses the shape of the wage distribution and its change over time, combining visual and numerical representations of the empirical distribution of median-normalized hourly wages. Applied to the group of full-time wage earners in the United States in the 1990s, the new method produces new empirical results that challenge the dominant view on the evolution of wage differences. In particular, the new results refute the notion that the distribution of wages has “polarized” in the 1990s, revealing, instead, a more complex pattern characterized by the expansion at and below the median hourly wage, the contraction of the upper-middle, and a disproportionate increase, or “protrusion,” at the very top, which in magnitude stands, however, well below the expansion observed in the bottom half. An extension of the analysis to the 1980s yields a pattern for the whole period than can be considered an empirical discovery, since it reveals an empirical phenomenon that has previously not been observed empirically or discussed theoretically. More specifically, the combination of the 1980s and 1990s patterns reveal an oscillation of employment change in the bottom half, the accumulating contraction of the upper-middle and the gradual separation of the expanding top.
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Authors: Scaglione, Matías
Publisher: University of Wisconsin
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
Countries: United States