Why is wage inequality so high in the United States? Pitching cognitive skills against institutions (once again)

Stijn Broecke, Glenda Quintini () and Marieke Vandeweyer

No 504893, Working Papers of VIVES - Research Centre for Regional Economics from KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics

Abstract: We revisit the relationship between cognitive skills and wage inequality using data from the Survey of Adult Skills (PIAAC). We argue that previous research suffered from a number of methodological shortcomings, and we offer a single and unified analytical framework for assessing the contribution of skills (including demand and supply conditions) and labour market institutions to wage inequality. Contrary to most previous research, we find that skills are at least as important as labour market institutions in explaining higher wage inequality in the United States.

Date: 2015-08
Note: paper number DPS 15.18
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Published in CES - Discussion paper series,, pages 1-32

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Working Paper: Why is wage inequality so high in the United States? Pitching cognitive skills against institutions (once again) (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:vivwps:504893

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