Accounting for Wage and Employment Changes in the U. S. from 1968-2000: A Dynamic Model of Labor Market Equilibrium

Donghoon Lee and Kenneth Wolpin ()
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Kenneth Wolpin: Department of Economics, University of Pennsylvania

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: In this paper, we present a unified treatment of and explanation for the evolution of wages and employment in the U.S. over the last 30 years. Specifically, we account for the pattern of changes in wage inequality, for the increased relative wage and employment of women, for the emergence of the college wage premium and for the shift in employment from the goods to the service-producing sector. The underlying theory we adopt is neoclassical, a two-sector competitive labor market economy in which the supply of and demand for labor of heterogeneous skill determines spot market skill-rental prices. The empirical approach is structural. The model embeds many of the features that have been posited in the literature to have contributed to the changing U.S. wage and employment structure including skill-biased technical change, capital-skill complementarity, changes in relative product-market prices, changes in the productivity of labor in home production and demographics such as changing cohort size and fertility.

Keywords: Male-Female Wage Differential; Wage Inequality; College Wage Premium (search for similar items in EconPapers)
JEL-codes: E24 J2 J3 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2005-09-01, Revised 2006-01-02
New Economics Papers: this item is included in nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Accounting for wage and employment changes in the US from 1968-2000: A dynamic model of labor market equilibrium (2010)
Working Paper: Accounting for Wage and Employment Changes in the U.S. from 1968-2000: A Dynamic Model of Labor Market Equilibrium (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:06-005

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