Working Paper: NBER ID: w20855
Authors: Ariel Burstein; Eduardo Morales; Jonathan Vogel
Abstract: We perform a quantitative analysis of observed changes in U.S. between-group inequality between 1984 and 2003. We use an assignment framework with many labor groups, equipment types, and occupations in which changes in inequality are caused by changes in workforce composition, occupation demand, computerization, and labor productivity. We parameterize our model using direct measures of computer usage within labor group-occupation pairs and quantify the impact of each shock for various measures of between-group inequality. We find, for instance, that the combination of computerization and shifts in occupation demand account for roughly 80% of the rise in the skill premium, with computerization alone accounting for roughly 60%. We show theoretically how computerization and changes in occupation demand may be caused by international trade and quantify the impact of trade in computers on U.S. inequality.
Keywords: betweengroup inequality; computerization; occupation demand; international trade
JEL Codes: E24; F16; J2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| computerization (L86) | rise in the skill premium in the U.S. (J39) |
| shifts in occupation demand (J29) | rise in the skill premium in the U.S. (J39) |
| computerization + shifts in occupation demand (O14) | rise in the skill premium in the U.S. (J39) |
| computerization (L86) | disaggregated measures of between-education inequality (I24) |
| computerization (L86) | relative wages of workers with graduate training compared to high school dropouts (J39) |
| computerization (L86) | gender wage gap (J31) |
| international trade (F19) | computerization and changes in occupation demand (J29) |