Earnings inequality and skill mismatch in the U.S.: 1973-2002

Fabian Slonimczyk ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper shows that skill mismatch is a significant source of inequality in real earnings in the U.S. and that a substantial fraction of the increase in wage dispersion during the period 1973-2002 was due to the increase in mismatch rates and mismatch premia. In 2000-2002 surplus and deficit qualifications taken together accounted for 4.3 and 4.6 percent of the variance of log earnings, or around 15 percent of the total explained variance. The dramatic increase in over-education rates and premia accounts for around 20 and 48 percent of the increase in the Gini coefficient during the 30 years under analysis for males and females respectively. The surplus qualification factor is important in understanding why earnings inequality polarized in the last decades.

Keywords: Skill Mismatch; Earnings Inequality; Shapley Value Decomposition (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-lab and nep-lma
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Earnings inequality and skill mismatch in the U.S.: 1973–2002 (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:35449

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