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Title: Technological Effects on Earnings Inequality within Occupations, 1968-2003
Citation Type: Working Paper
Publication Year: 2004
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Abstract: The paper shows trends in the dispersion of earnings within 300 separate occupation categories for which consistent information is available from the Current Population Survey and the decennial U.S. Census for various periods since 1960. The paper examines the evidence for two effects. The first is that because improving media technologies and wider audiences around the world, superstars arise to various degrees in various occupations, especially athletes but also others whose performance can be amplified by media technologies photographers, inequality has been rising. This superstars effect (described by Rosen, 1981, and Frank and Cook, 1995) appears to be a long term development which is likely to continue. The second effect is that in occupations which required close work with new semiconductor and information technologies, such as electrical engineers, computer programmers, systems analysts, and data processing equipment repair persons, inequality rose. In other engineering job categories, inequality did not rise. It is argued here that this third effect is a result of technological uncertainty and complexity, which has been described by a diffuse literature including Greenwood and Yorukoglu (1997) and also historical comparisons which are reviewed here in light of this evidence. Uncertainty is a result of novelty and therefore should be temporary. It may already be in decline on the basis of the evidence here. The uncertainty and superstars effects occur to some extent in many occupations. In principle these are continuous variables, not distinguished in a binary way between the categories shown here. Therefore we examine also occupations in which these effects are least likely those which call for a nurturing role, and/or those in which the jobholder must be physically present to do the work. These are jobs in which uncertainty and media-amplification are least likely, and we show here that inequality within such occupations has fallen sharply.
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Authors: Meyer, Peter B.
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Institution: Bureau of Labor Statistics
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Data Collections: IPUMS USA, IPUMS CPS
Topics: Labor Force and Occupational Structure
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