Related BLS programs | Related articles
December 1997, Vol. 120, No. 12
Robert I. Lerman
Rising earnings inequality in the United States is conventional wisdom among economists, policy elites, and journalists. Over the past several years, an extensive literature has emerged that documents increases in earnings inequality and attempts to provide explanations of the phenomenon.1 Richard Freeman has argued that "Researchers using several data sourcesincluding household survey data from the Current Population Survey, other household surveys, and establishment surveyshave documents that wage inequality and skill differentials in earnings and employment increased sharply in the United States from the mid-1970s through the 1980s and into the 1990s."2
Recent publications reinforce the consensus that earnings inequality is continuing to increase. The 1997 Economic Report of the President points to growing inequality in annual earnings in trends among all male full-time, year-round workers, in the earnings ratios of college graduates to high school graduates, in the wage advantage of older to younger workers, and in the 90-50 and 50-10 cutoff ratios within groups classified by education (male high school graduates) and age (25- to 34-year-old men).3 This past spring, the Journal of Economic Perspectives published a symposium of four articles: all cite a growth in earnings inequality over various periods, including the late 1980s and early 1990s.4
This excerpt is from an article published in the December 1997 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
Read abstract Download full text in PDF (1032K)
1 See, for example, Frank Levy and Richard Murnane, "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, September 1992, pp. 1333-81; Chinhui Juhn, Kevin Murphy, and Brooks Pierce, "Wage Inequality and the rise in returns to skill," Journal of Political Economy, June 1993, pp. 410-42; and Lawrence Katz and Kevin Murphy, "Changes in Relative Wages, 1963-87: Supply and Demand Factors," Quarterly Journal of Economics, February 1992, pp. 35-78. More recently, Katherine Bradbury, "The Growing Inequality of Family Incomes: Changing Families and Changing Wages," New England Economic Review, pp. 55-82, has found continuing increases in earnings inequality through the 1980s and on into the early 1990s.
2 Richard Freeman, "Are your wages set in Beijing?" Journal of Economic Perspectives, Summer 1995, pp. 15-32.
3 Economic Report of the President: 1997 (Washington, DC, U.S. Government Printing Office, 1997).
4 See the following articles from the spring 1997 issue of Journal of Economic Perspectives: Peter Gottschalk, "Inequality, Income Growth, and Mobility," pp. 21-40; George Johnson, "Changes in Earnings Inequality: The Role of Demand Shifts," pp. 41-54; Robert Topel, "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," pp. 55-74; and Nicole Fortin and Thomas Lemieux, "Institutional Changes and Rising Wage Inequality: Is There a Linkage?" pp. 75-96.
Related BLS programs
Labor Force Statistics from the Current Population Survey
Labor Review articles
Has wage inequality stopped growing? December 1997.
Earnings mobility in the United States, 1967-91. September 1995.
A surge in growing income inequality? August 1995.
Gender-related shifts in the distribution of wages. July 1994.
Trends in wage and salary inequality, 1967-88. June 1992.
Within Monthly Labor Review Online:
Welcome | Current Issue | Index | Subscribe | Archives
Exit Monthly Labor Review Online:
BLS Home | Publications & Research Papers