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Wage Inequality, Changes In

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Abstract

We examine trends in wage inequality in the United States and other countries since the 1960s. We show that there has been a secular increase in the 90–50 wage differential in the United States and the United Kingdom since the late 1970s. By contrast the 50–10 wage differential rose mainly in the 1980s and flattened or fell in the 1990s and 2000s. We conclude that a version of the skill-biased technical change hypothesis combined with institutional changes (the decline in the minimum wage and trade unions) continues to offer the best explanation for the observed patterns of change.

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Acknowledgment

The Economic and Social Research Council has given financial support for this research through the Centre for Economic Performance. The usual disclaimer applies.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Stephen Machin & John Van Reenen

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  1. Stephen Machin
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  2. John Van Reenen
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Machin, S., Van Reenen, J. (2018). Wage Inequality, Changes In. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2001

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