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The Effects of Technological Change on Earnings and Income Inequality inthe United States

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  • McKinley L. Blackburn
  • David E. Bloom

Abstract

This paper explores the relationship between technological change and inequality in the U.S. since the late 1960's. The analysis focuses primarily on studying patterns and trends in the dispersion of various distributions of earnings and income during this recent period of rapid technological progress. We review relevant literature and perform several empirical analyses using microdata from the March Current Population Surveys from 1968 to 1986. Our main findings are that there is little empirical evidence that earnings inequality, measured across individual workers, has increased since the late 1960's, and even less evidence to support the hypothesis that any changes that have occurred have resulted from the effect of technological change on the demand for labor. However, we do find evidence of an increase since the late 1960's in the inequality of total family income, measured across families. Moreover, much of the increase appears to be due to changes in family composition and labor supply behavior, suggesting that the main effects of recent technological change on inequality have been supply-side in nature.

Suggested Citation

  • McKinley L. Blackburn & David E. Bloom, 1987. "The Effects of Technological Change on Earnings and Income Inequality inthe United States," NBER Working Papers 2337, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2337
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    1. Martin Dooley & Peter Gottschalk, 1985. "The increasing proportion of men with low earnings in the United States," Demography, Springer;Population Association of America (PAA), vol. 22(1), pages 25-34, February.
    2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    3. Richard Burkhauser & Karen Holden & Daniel Myers, 1986. "Marital disruption and poverty: The role of survey procedures in artificially creating poverty," Demography, Springer;Population Association of America (PAA), vol. 23(4), pages 621-631, November.
    4. Champernowne, D G, 1974. "A Comparison of Measures of Inequality of Income Distribution," Economic Journal, Royal Economic Society, vol. 84(336), pages 787-816, December.
    5. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    6. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
    7. Dooley, Martin D & Gottschalk, Peter, 1984. "Earnings Inequality among Males in the United States: Trends and the Effect of Labor Force Growth," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 59-89, February.
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    Cited by:

    1. Ann P. Bartel & Nachum Sicherman, 1990. "Technological Change and the Careers of Older Workers," NBER Working Papers 3433, National Bureau of Economic Research, Inc.
    2. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216, Elsevier.
    3. McKinley L. Blackburn & David E. Bloom, 1993. "The Distribution of Family Income: Measuring and Explaining Changes in the 1980s for Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 233-266, National Bureau of Economic Research, Inc.
    4. Jabłoński Łukasz, 2019. "Inequality in Economics: The Concept, Perception, Types, and Driving Forces," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 27(1), pages 17-43, March.
    5. Thomas A. Husted, 1991. "Changes In State Income Inequality From 1981 To 1987," The Review of Regional Studies, Southern Regional Science Association, vol. 21(3), pages 249-260, Fall.
    6. Buchinsky, Moshe, 1995. "Quantile regression, Box-Cox transformation model, and the U.S. wage structure, 1963-1987," Journal of Econometrics, Elsevier, vol. 65(1), pages 109-154, January.
    7. Mark E. Schweitzer, 1993. "Accounting for earnings inequality in a diverse work force," Working Papers (Old Series) 9314, Federal Reserve Bank of Cleveland.
    8. David W. Rasmussen, 1990. "Economic Development as an Empirical Concept," The Review of Regional Studies, Southern Regional Science Association, vol. 20(1), pages 56-61, Winter.

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