Working Paper: NBER ID: w3927
Authors: Lawrence F. Katz; Kevin H. Murphy
Abstract: A simple supply and demand framework is used to analyze changes in the U.S. wage structure from 1963 to 1987. Rapid secular growth in the demand for more-educated workers, 'more-skilled' workers, and females appears to be the driving force behind observed changes in the wage structure. Measured changes in the allocation of labor between industries and occupations strongly favored college graduates and females throughout the period. Movements in the college wage premium over this period appear to be strongly related to fluctuations in the rate of growth of the supply of college graduates.
Keywords: wage structure; labor demand; education; inequality
JEL Codes: J31; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| demand for more educated and skilled workers (J24) | wage structure (J31) |
| supply of college graduates (D29) | wage differentials (J31) |
| demand for labor favoring females (J21) | narrowing of gender wage gap (J79) |
| technological changes and shifts in labor demand (J29) | demand for more educated and skilled workers (J24) |