Earnings Inequality Narrows for Young Workers Despite a Widening Wage Structure
THE QUARTERLY REVIEW OF ECONOMICS AND FINANCE, Vol. 35 No. 4, Winter 1995
Posted: 9 Jul 1998
Inequality of wage rates has widened in the United States. But inequality of earnings also depends on the distribution of hours worked. If the distribution of hours contracts sufficiently, earnings inequality may narrow despite a widening wage structure. The present study examines recent trends in inequality for young workers and, consistent with the preceding scenario, finds that rising inequality of wage rates has been overwhelmed by declining inequality of hours worked. As a consequence, earnings inequality of young workers declined during the 1980s.
JEL Classification: E24
Suggested Citation: Suggested Citation