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Theory-Driven Facts and the Growth in Earnings Inequality

David Howell ()

Review of Radical Political Economics, 1999, vol. 31, issue 1, 54-86

Abstract: It is widely accepted that the rise in U.S. wage inequality can be explained by skill-biased technological change: workplace computerization produced demand shifts that worked with a simply supply and demand "vision" of the labor market than with direct statistical evidence, which is remarkably limited. Indeed, the dominance of this elementary textbook vision has led, I argue, to a conflation between statistical facts and "theory-driven" facts-those statements about reality that are selected, interpreted, or simply created to confirm a vision of the way things work. The paper concludes by outlining an alternative explanation of the growth in wage inequality based on a sharply different, Gordonian, vision of the labor market.

Date: 1999
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Handle: RePEc:sae:reorpe:v:31:y:1999:i:1:p:54-86