Working Paper: NBER ID: w26428
Authors: Edward P. Lazear
Abstract: Average wage growth is closely related to aggregate productivity growth across countries and within countries over time. The commonality of patterns across OECD countries suggests that common factors are at work. Are productivity-based explanations of wage changes consistent with increasing variance in wages as well as increases in mean wages as suggested by skill-biased technological change or other factors? To answer this, it is necessary to observe education-specific productivity growth. Cross-industry comparisons reveal that industries dominated by highly educated workers have higher productivity and experienced higher-than-average productivity growth that is more than sufficient to account for increasing skill differentials.
Keywords: No keywords provided
JEL Codes: J00; J30; M50
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Aggregate Productivity (E23) | Wages (J31) |
| Skill-Biased Technological Change (J24) | Productivity Growth (O49) |
| Productivity Growth (O49) | Wage Dispersion (J31) |
| Productivity Distribution (D39) | Wage Inequality (J31) |
| Technological Change (O33) | Wage Declines for Certain Groups (J39) |
| Productivity Increases (O49) | Wages under Certain Conditions (J38) |