Fichas
Wage Inequality
Fichas del conjunto (21)
- 1How are wages distributed?Skewed
mean > median
More distribution at high earners - 2What characteristics are associated with higher pay?- Education
- Experience
- Training
- Job tenure - 3What are other measurable influencing factors of pay?- Age
- Gender
- Ethnicity
- Region
- Occupation - 4What are other unmeasurable influencing factors of pay?- Ability
- Commitment
- Work ethic - 5Between which groups is the largest wage inequality observed?Between skills groups
- 6What data is used to observe this group?Data on actual skills rarely available so use qualifications or occupation
- 7What might cause rising relative wage differentials?Fall in supply of skilled workers which decreases relative employment
- 8In what case would both relative wages and relative employment of skilled workers increase?If both relative wage and employment rise, suggests relative demand has increased more than relative supply
- 9What are the two most common explanations for both relative wages and relative employment of skilled workers increasing?- Skill-based technological change: new tech removes low skilled jobs while needing more high skilled jobs to operate
- Trade: developing countries have lower labour costs so can produce low-skill labour-intensive goods more cheapl. Developed countries cannot compete with so focus high skill capital intensive goods instead - 10Summarise a paper on SBTC What was found?Kruger (1993)
Included a computer use dummy when regressing ln(wage)
Hypothesis: if SBTC is important, those who use a computer should earn more
Induviduals using computers earned 17.6% more in 1989 than those who didn't holding all other factors constant. However it was better educated works who wereincreasingly using computers in the 80s.
Concludes increased computer use accountablr for more than 40% of growth in wage inequality - 11Summarise a paper on trade theoryDesjonqueres, Machin and Van Reenen (1999)
Test implications for trade theory
1. should be within sector movement away from skilled workers as relatively expensive
2. relative prices should fall in unskilled industries
3. skilled-unskilled differentials should fall in developing countries - 12What was found in the trade theory paper?No evidence of predicted implications of trade theory
1. Strong increases in within industry share of skilled employment - something else going on
2. No evidence of positive relationship between industry skill level and price changes
3. In sample of 5 developing countries, skilled-unskilled differentials fell in only 1
Important to remember that trade was not as important at the time of study as it is now - 13What is residual inequality?Wage inequality within groups of observationally similar worker
- 14What is job polarisation?Increase in employment share of jobs at the top and bottom of the wage distribution relataive to the middle
Decrease in demand for jobs in the middle of the wage distribution - 15What explains the change at the top? What can this theory not explain?SBTC
Cannot explain:
- The increase in residual inequality
- Why changes in wage inequality were different at the upper and the bottom half of the wage distribution - 16What are the 2 theories for the change at the bottom?1. Institutions
2. Tak-based technological change - 17How do institutions change wage inequality at the bottom?Certain institutions (trade unions, minimum wage, unemployment benefits) prop up wages at the bottom end, weakening these institutions increases wage inequality
Protection for low income distribution has declined - 18Summarise a paper investigating wage inequality at the bottom end of the distributionBlau and Khan (1996)
Shows wage inequality in the US is higher than other countries, particularly in the lower half, is:
- not due to characteristics: more unequal distribution of education etc but only slightly
- more due to difference in wages paid to workers of given characteristics in different countries (low skilled paid less in the US)
Early attempts not as good as measurement tools have improved - 19How does TBTC change wage inequality at the bottom?Categorising skilled and unskilled may be too simple
Should focus more on the nature of the job
Routine soon to be replaced by technology
Top: non-routine + cognative
Bottom: routine + manual - 20Summarise a paper investigating TBTCGoos and Manning (2007)
Argue routine tasks are largely semi-skilled and that non-routine manual jobs are the least skilled.
Therefore it is intermediate workers, not unskilled, who are most affected by technological change
This is the job polarisation story - 21What was the expected effect of offshoring? What was actually observed?Assumed it would wipe out industries and cause between industry employment movement
In actuality, industries outsourced low-skilled/routine task to developing countries leading to within industry employment change
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- Year 2 ECN21005 - Labour Economics Fichas sobre Wage Inequality, creado por Imogen Donoghue el 28/01/2023.
- Creado por
- Imogen Donoghue
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