Changes in Relative Wages, 1963-1987: Supply and Demand Factors

53 Pages Posted: 21 Dec 2000 Last revised: 29 Sep 2010

See all articles by Lawrence F. Katz

Lawrence F. Katz

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

Kevin M. Murphy

University of Chicago; National Bureau of Economic Research (NBER)

Date Written: December 1991

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.

Suggested Citation

Katz, Lawrence F. and Murphy, Kevin M., Changes in Relative Wages, 1963-1987: Supply and Demand Factors (December 1991). NBER Working Paper No. w3927. Available at SSRN: https://ssrn.com/abstract=249504

Lawrence F. Katz (Contact Author)

Harvard University - Department of Economics ( email )

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Kevin M. Murphy

University of Chicago ( email )

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National Bureau of Economic Research (NBER)

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United States

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