Skill-Biased Technological Change and Inequality in the U.S

Ana Ferreira (m.ferreira@novasbe.pt)
Additional contact information
Ana Ferreira: Nova School of Business and Economics

Notas Económicas, 2020, issue 51, 91-107

Abstract: Since the 1980s, income inequality has increased markedly and has reached the highest level ever since it started being recorded in the U.S. This paper uses an overlapping generations model with incomplete markets that allows for household heterogeneity that is calibrated to match the U.S. economy with the purpose to study how skill-biased technological change (SBTC) and changes in taxation quantitatively account for the increase in inequality from 1980 to 2010. We find that SBTC and taxation decrease account for 48% of the total increase in the income Gini coefficient. In particular, we conclude that SBTC alone accounted for 42% of the overall increase in income inequality, while changes in the progressivity of the income tax schedule alone accounted for 5.7%.

Keywords: Technical change; income inequality; wealth inequality; heterogeneity; taxation. (search for similar items in EconPapers)
JEL-codes: E21 J10 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://impactum-journals.uc.pt/notaseconomicas/article/view/9216/6933 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2020:i:51:p:91:107

DOI: 10.14195/2183-203X_51_5

Access Statistics for this article

Notas Económicas is currently edited by Pedro Cerqueira and Carlos Carreira

More articles in Notas Económicas from Faculty of Economics, University of Coimbra Contact information at EDIRC.
Bibliographic data for series maintained by Sofia Antunes (ceber@uc.pt).