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Changes in wage inequality

Machin, Stephen and Van Reenen, John ORCID: 0000-0001-9153-2907 (2007) Changes in wage inequality. Centre for Economic Performance special papers (CEPSP18). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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We examine trends in wage inequality in the US and other countries over the past four decades. We show that there has been a secular increase in the 90-50 wage differential in the US and the UK since the late 1970s. By contrast the 50-10 differential rose mainly in the 1980s and flattened or fell in the 1990s and 2000s. We analyze the reasons for these trends and 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.

Item Type: Monograph (Report)
Official URL:
Additional Information: © 2007 S. Machin and J. Van Reenen
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L32 - Public Enterprises
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General
L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises; Privatization; Contracting Out
Date Deposited: 07 May 2008 08:30
Last Modified: 13 Oct 2021 23:16

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