期刊名称：HIER Discussion Paper Series / Harvard Institute of Economic Research
出版年度：2005
卷号：2005
出版社：Harvard Institute of Economic Research
摘要：During the early 1980s, earnings inequality in the U.S. labor market rose
relatively uniformly throughout the wage distribution. But this uniformity gave
way to a significant divergence starting in 1987, with upper-tail (90/50)
inequality rising steadily and lower tail (50/10) inequality either flattening
or compressing for the next 16 years (1987 to 2003). This paper applies and
extends a quantile decomposition technique proposed by Machado and Mata (2005)
to evaluate the role of changing labor force composition (in terms of education
and experience) and changing labor market prices to the expansion and subsequent
divergence of upper- and lower-tail inequality over the last three decades We
show that the extended Machado-Mata quantile decomposition corrects shortcomings
of the original Juhn-Murphy-Pierce (1993) full distribution accounting method
and nests the kernel reweighting approach proposed by DiNardo, Fortin and
Lemieux (1996). Our analysis reveals that shifts in labor force composition have
positively impacted earnings inequality during the 1990s. But these
compositional shifts have primarily operated on the lower half of the earnings
distribution by muting a contemporaneous, countervailing lower-tail price
compression. The steady rise of upper tail inequality since the late 1970s
appears almost entirely explained by ongoing between-group price changes
(particularly increasing wage differentials by education) and residual price
changes
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