Wage Inequality in Austin - Different Industries, Different Stories

Abstract:     
The growth of Austin's high-tech industry and the industry's multiple contributions to economic development led Forbes magazine to rank Austin as the number one and number two place to live in the United States in 2000 and 2001, respectively. Our data show that college and high-school graduates earned, on average, $5 and $4 dollars per hour more in the high-tech industry than in the non-high tech industry in Austin in 1990. The objective of previous studies has been to track the effects of the "new economy" on wages and wage inequalities in Austin. Implicit in this analysis is that the wage inequality story is one foretold by the "new economy." We find, however, that non-high-tech industries in Austin still generate more than 80 percent of employment in the city. They pay lower wages for all percentiles of the wage distribution. More important, non-high-tech industries employ 95 percent of individuals in the bottom 10 percent of the wage distribution in Austin. This evidence suggests that wage inequality in Austin is a story largely foretold by the old economy or the non-high-tech industry.

Number of Pages in PDF File: 6

JEL Classification: J31, J39, O15, J24

Accepted Paper Series