Working Paper: CEPR ID: DP1490
Authors: Jonathan Haskel
Abstract: What demand-side and institutional factors raised the skilled wage premium over the 1980s in UK manufacturing? Using a panel of 80 industries for 1980?89 we find that: (i) the average skill premium rose by around 13 percentage points; (ii) computer introduction explains around 50% of this rise; (iii) growth in small firms and in contracting-out together explain around 20%; and (iv) the fall in unionisation explains around 15%.
Keywords: wage inequality; skill premia; computers; small firms; UK
JEL Codes: J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| computer introduction (dchips) (L63) | skill premium (J24) |
| growth of small firms (dsmallfirms) (L25) | skill premium (J24) |
| contracting out (dcontracting) (L33) | skill premium (J24) |
| union density (dunion) (J59) | skill premium (J24) |
| trade pressures (dtrade) (F19) | unskilled wages (F66) |