Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach

John DiNardo, Nicole Fortin and Thomas Lemieux

No 5093, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper presents a semiparametric procedure to analyze the effects of institutional and labor market factors on recent changes in the U.S. distribution of wages. The effects of these factors are estimated by applying kernel density methods to appropriately 'reweighted' samples. The procedure provides a visually clear representation of where in the density of wages these various factors exert the greatest impact. Using data from the Current Population Survey, we find, as in previous research, that de-unionization and supply and demand shocks were important factors in explaining the rise in wage inequality from 1979 to 1988. We find also compelling visual and quantitative evidence that the decline in the real value of the minimum wage explains a substantial proportion of this increase in wage inequality, particularly for women. We conclude that labor market institutions are as important as supply and demand considerations in explaining changes in the U.S. distribution of wages from 1979 to 1988.

JEL-codes: C14 J31 (search for similar items in EconPapers)
Date: 1995-04
Note: LS
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Published as Econometrica, vol.64, no.5, pp.1001-1044, September 1996.

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Related works:
Journal Article: Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach (1996)
Working Paper: Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach (1994)
Working Paper: Labor Market Institutions and the Distribution of Wages, 1973-1992: a Semiparametric Approach (1994)
Working Paper: Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach (1994)
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