Working Paper: NBER ID: w12077
Authors: Thomas Lemieux
Abstract: The paper presents descriptive evidence from quantile regressions and more "structural" estimates from a human capital model with heterogenous returns to show that most of the increase in wage inequality between 1973 and 2005 is due to a dramatic increase in the return to post-secondary education. The model with heterogenous returns also helps explain why both the relative wages and the within-group dispersion among highly-educated workers have increased in tandem over time. These findings add to the growing evidence that, far from being ubiquitous, changes in wage inequality are increasingly concentrated in the very top end of the wage distribution.
Keywords: No keywords provided
JEL Codes: J3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stability of wage structure for lower education levels (J31) | contrasts with volatility in postsecondary education returns (D29) |
| increase in return to postsecondary education (I26) | increase in wage inequality (J31) |
| increase in return to postsecondary education (I26) | increase in return to education at higher quantiles (I26) |
| increase in return to postsecondary education (I26) | increase in within-group dispersion among highly educated workers (J79) |
| relative wages of highly educated workers (J39) | increase in wage inequality (J31) |
| changes in wage structure (J31) | changes in returns to education and experience (I26) |