A Comparison of Changes in the Structure of Wages

53 Pages Posted: 25 Aug 2000 Last revised: 18 Nov 2000

See all articles by Lawrence F. Katz

Lawrence F. Katz

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Gary W. Loveman

Harvard Business School

David G. Blanchflower

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER); University of Stirling - Department of Economics

Date Written: March 1993

Abstract

This paper compares changes in the structure of wages in France, Great Britain, Japan. and the United States over the last twenty years. Wage differentials by education and occupation (skill differentials) narrowed substantially in all four countries in the 1970s. Overall wage inequality and skill differentials expanded dramatically in Great Britain and the United States and moderately in Japan during the 1980s. In contrast, wage inequality did not increase much in France through the mid-1980s. Industrial and occupational shifts favored more-educated workers in all four countries throughout the last twenty years. Reductions in the rate of the growth of the relative supply of college-educated workers in the face of persistent increases in the relative demand for more-skilled labor can explain a substantial portion of the increase in educational wage differentials in the United States, Britain, and Japan in the 1980s. Sharp increases in the national minimum wage (the SM1C) and the ability of French unions to extend contracts even in the face of declining membership helped prevent wage differentials from expanding in France through the mid-1980s.

Suggested Citation

Katz, Lawrence F. and Loveman, Gary W. and Blanchflower, David G., A Comparison of Changes in the Structure of Wages (March 1993). NBER Working Paper No. w4297, Available at SSRN: https://ssrn.com/abstract=240075

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Gary W. Loveman

Harvard Business School

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David G. Blanchflower

Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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University of Stirling - Department of Economics ( email )

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