Working Paper: NBER ID: w5718
Authors: Michael Kremer; Eric Maskin
Abstract: Evidence from the US, Britain, and France suggests that recent growth in wage inequality has been accompanied by greater segregation of high- and low-skill workers into separate firms. A model in which workers of different skill-levels are imperfect substitutes can simultaneously account for these increases in segregation and inequality either through technological change, or, more parsimoniously, through observed changes in the skill-distribution
Keywords: Wage Inequality; Skill Segregation; Labor Economics
JEL Codes: J31; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| skill dispersion (D39) | firms specialize in one skill level (J24) |
| increase in mean skill level (J24) | enhance wages of low-skill workers (J38) |
| sufficiently dispersed skill distribution (D39) | raise high-skill wages (J24) |
| sufficiently dispersed skill distribution (D39) | decrease low-skill wages (F66) |
| greater skill dispersion (D29) | more segregated by education in employment (J79) |