The Changing Nature of Wage Inequality

40 Pages Posted: 24 Oct 2007 Last revised: 15 Dec 2022

See all articles by Thomas Lemieux

Thomas Lemieux

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 2007

Abstract

The paper reviews recent developments in the literature on wage inequality, with a particular focus on why inequality growth has been particularly concentrated in the top end of the wage distribution over the last 15 years. Several possible institutional and demand-side explanations are discussed for the secular growth in wage inequality in the United States and other advanced industrialized countries. The paper concludes that three promising explanations for the growth in top-end wage inequality are de-unionization, the increased prevalence of pay for performance, and changes in the relative demand for the types of tasks performed by workers in high-paying occupations.

Suggested Citation

Lemieux, Thomas, The Changing Nature of Wage Inequality (October 2007). NBER Working Paper No. w13523, Available at SSRN: https://ssrn.com/abstract=1024127

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