IDEAS home Printed from https://ideas.repec.org/p/pri/indrel/399.html
   My bibliography  Save this paper

Wage Inequality in the U.S. during the 1980s: Rising Dispersion or Falling Minimum Wage?

Author

Listed:
  • David S. Lee

    (Princeton University)

Abstract

Inequality in the unconditional distribution of observed wage rates in the U.S. rose substantially during the 1980s, mostly in the lower tail of the distribution. The causes of this rising wage inequality are obscured by the fact that concurrent decreases in the federal minimum wage tend to increase observed wage inequality, regardless of its effect on employment. This study uses regional variation in the relative level of the federal minimum wage to separately identify the impact of the minimum wage from nation-wide growth in latent wage dispersion during the 1980s. CPS wage data show a tight empirical relation between the relative level of the federal minimum wage and dispersion in the lower tail of the wage distribution, across states and over time. After accounting for the diminishing impact of the minimum wage during the 1980s, the evidence points to little or no increase in wage dispersion in the lower tail of the wage distribution.

Suggested Citation

  • David S. Lee, 1998. "Wage Inequality in the U.S. during the 1980s: Rising Dispersion or Falling Minimum Wage?," Working Papers 778, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:399
    as

    Download full text from publisher

    File URL: https://dataspace.princeton.edu/bitstream/88435/dsp01765371335/1/399.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John W. Budd & Brian P. McCall, 2001. "The Grocery Stores Wage Distribution: A Semi-Parametric Analysis of the Role of Retailing and Labor Market Institutions," ILR Review, Cornell University, ILR School, vol. 54(2A), pages 484-501, March.
    2. David Neumark & Mark E. Schweitzer & William L. Wascher, 1999. "The effects of minimum wages throughout the wage distribution," Working Papers (Old Series) 9919, Federal Reserve Bank of Cleveland.
    3. Lawrence F Katz, 1998. "Reflections on US Labour Market Performance," RBA Annual Conference Volume (Discontinued), in: Guy Debelle & Jeff Borland (ed.),Unemployment and the Australian Labour Market, Reserve Bank of Australia.

    More about this item

    Keywords

    wage inequality; minimum wage; wage structure; within-group inequality;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F20 - International Economics - - International Factor Movements and International Business - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pri:indrel:399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bobray Bordelon (email available below). General contact details of provider: https://edirc.repec.org/data/irprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.