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Training and the Growth of Wage Inequality

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  • Jill Constantine
  • David Neumark

Abstract

Shifts in the incidence of various types of training over the 1980s favored more-educated, more-experienced workers. Coupled with the fact that this training is associated with higher wages, these shifts suggest that training may have contributed to the growth of wage inequality in this period. However, the shifts were apparently too small, or the returns to training too low, for training to have played a substantial role in this increase. The estimated changes in wage differentials associated with schooling and experience are at best only slightly smaller once we account for changes in the distribution of training across schooling and experience groups, as well as changes in the returns to training and in the length of training programs.

Suggested Citation

  • Jill Constantine & David Neumark, 1994. "Training and the Growth of Wage Inequality," NBER Working Papers 4729, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:4729
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    References listed on IDEAS

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    1. Neumark, David & Wascher, William, 2001. "Minimum Wages and Training Revisited," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 563-595, July.
    2. Michael J. Handel, 2016. "What do people do at work? [Was machen Menschen bei der Arbeit?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(2), pages 177-197, October.
    3. Jörn-Steffen Pischke, 2001. "Continuous training in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(3), pages 523-548.
    4. Leonardi, Marco, 2003. "Firm Heterogeneity in Capital/Labor Ratios and Wage Inequality," IZA Discussion Papers 909, Institute of Labor Economics (IZA).
    5. Michael J. Handel, "undated". "Is There a Skills Crisis? Trends in Job Skill Requirements, Technology, and Wage Inequality in the United States," Economics Public Policy Brief Archive ppb_62, Levy Economics Institute.
    6. Daron Acemoglu, 1999. "Changes in Unemployment and Wage Inequality: An Alternative Theory and Some Evidence," American Economic Review, American Economic Association, vol. 89(5), pages 1259-1278, December.
    7. Handel, Michael J., 2003. "Implications of Information Technology for Employment, Skills, and Wages: A Review of Recent Research," MPRA Paper 80077, University Library of Munich, Germany.
    8. Marco Leonardi, 2007. "Firm heterogeneity in capital-labour ratios and wage inequality," Economic Journal, Royal Economic Society, vol. 117(518), pages 375-398, March.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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