Wage Dispersion in the 1980s: Resurrecting the Role of Trade through the Effects of Durable Employment Changes

Elaine Buckberg and Alun Thomas
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Elaine Buckberg: International Monetary Fund
Alun Thomas: International Monetary Fund

IMF Staff Papers, 1996, vol. 43, issue 2, 336-354

Abstract: This paper finds that changes in durable manufacturing employment and investment in computer equipment can explain rising wage dispersion in the United States, measured in terms of the education premium. Reduced employment opportunities in durables production drive down the average wage for workers with only a high school education, thereby increasing the wage premium for college education. An innovation in this paper is the inclusion of investment in equipment as a proxy for skill-biased technical change. The rise in the technical skill premium could alone explain all of the rise in the college premium since 1979 were there no offsetting effects.

JEL-codes: J30 J31 (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:imfstp:v:43:y:1996:i:2:p:336-354

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