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Title: Corporate Restructuring and Rising Wage Inequality in U.S. Urban Labor Markets, 1970-2000: The Role of Subcontracted Employment

Citation Type: Conference Paper

Publication Year: 2002

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Abstract: Organizational changes have received little scholarly attention as a cause of rising wage inequality and yet corporate restructuring has been widespread. This paper focuses on one piece of this relationship: the impact of subcontracting on levels and changes in wage inequality in U.S. cities over the past three decades. The analysis is conducted for a sample of 115 cities across 4 time points1969, 1979, 1989, and 1999. Preliminary results reveal that the share of employment in subcontracting industries explains more of the variance in a key measure of wage inequality (within-group wage inequality) across cities in cross-sectional analyses than most other explanatory variables. The effects are also greatest in the earlier years, the very years in which the explanation of wage inequality is least understood, and the years in which these industries grew the most. These results persist in models with extensive controls for other factors and with fixed effects for cities, but they do not persist in all specifications that include fixed effects for time period. Thus the results are mixed and call for additional measures of corporate restructuring that are not as closely correlated with the overall time trend of rising wage inequality.

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Authors: McCall, Leslie

Conference Name: Urban Affairs Association

Publisher Location: Boston, MA

Data Collections: IPUMS USA

Topics: Other, Poverty and Welfare

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