Macroeconomic Conditions and Wage Inequality: Expanding and Analyzing the Worldwide Dataset

Annals of Economics and Finance 24-2 (2023): 329-362

49 Pages Posted: 10 Apr 2023 Last revised: 1 Nov 2023

See all articles by Saiah Lee

Saiah Lee

Ulsan National Institute of Science and Technology (UNIST); Seoul National University

Date Written: April 28, 2023

Abstract

This paper introduces a comprehensive dataset examining wage inequality and returns to education across 40 countries, revisiting earlier studies on the effects of economic development, trade openness, and returns to skill on wage inequality. Our findings include: (i) the presence of Kuznets' "inverted U-curve" in wage inequality data, (ii) a positive relationship between trade openness and both wage inequality and returns to education, (iii) a positive relationship between levels of wage inequality and levels of return to education, and (iv) an intriguing phenomenon where accelerated skill-biased technological change leads to a deceleration of the wage gap widening process, as evidenced by the negative relationship between changes in wage inequality and changes in returns to education.

Keywords: wage inequality, Kuznets curve, trade openness, skill-biased technological change

JEL Classification: F66, I24, I26, J31, O33

Suggested Citation

Lee, Saiah, Macroeconomic Conditions and Wage Inequality: Expanding and Analyzing the Worldwide Dataset (April 28, 2023). Annals of Economics and Finance 24-2 (2023): 329-362, Available at SSRN: https://ssrn.com/abstract=4402417 or http://dx.doi.org/10.2139/ssrn.4402417

Saiah Lee (Contact Author)

Ulsan National Institute of Science and Technology (UNIST) ( email )

50 UNIST-gil, Ulju-gun
Ulsan, 44919
+82-52-217-3202 (Phone)

HOME PAGE: http://saiahlee.unist.ac.kr

Seoul National University

Kwanak-gu
Seoul, 151-742

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