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This paper analyzes the effect of recent technical change on the labor market and explains the observed differences in wage inequality among advanced countries. In particular, we focus on the difference between the inequality in the U.S. and in continental Europe. Many studies have indicated a rise in wage inequality in the U.S. over the past three decades. On the other hand, there has been little change in wage inequality in continental Europe. By introducing human capital investment into the model by Acemoglu (Am Econ Rev 89:1259-1278, ), we show that ex ante homogeneous economies would have distinct ex post wage distribution. The strategic complementarity between human capital investment and firms' hiring strategies yields the possibility that multiple equilibria exist, which explains the difference in wage distribution between the U.S. and Europe. In addition, we show that differences in tax or education systems can explain the difference in wage distribution between the U.S. and Europe. [ABSTRACT FROM AUTHOR]

This paper examines the economic impact of the second great immigration wave (1945-2000) on the US economy. Our analysis relies on a computable general equilibrium model combining the major interactions between immigrants and natives (labor market impact, fiscal impact, capital deepening, endogenous education, endogenous inequality). Contrary to recent studies, we show that immigration induced important net gains and small redistributive effects among natives. According to our simulations, the postwar US immigration is beneficial for all natives cohorts and all skill groups. Nevertheless, the gains would have been larger if the US had conducted a more selective immigration policy. [ABSTRACT FROM AUTHOR]

There is much work on the relationships between crime, unemployment and inequality. At the turn of the millennium, 2.1 million people in the U.S. were in prison or jail, rising to 6.3 million if we include those on probation or parole. A key finding is that introducing criminal activity into otherwise standard models of the labor market can significantly affect the predictions of these models. The first section of this paper presents the worker's problem taking wages as given. This provides a natural extension to the textbook job search model to incorporate crime. Section II analyzes wage setting. This shows how various types of equilibria with different crime rates can arise for different parameter values, and how sometimes multiple equilibria coexist, with different amounts of crime, inequality and unemployment. This paper has developed a search equilibrium framework that can be used to analyze the interrelations between crime, unemployment and inequality. The model is essential to analyze feedbacks that can lead to multiplicity.

The majority of mainstream economists believe that globalization and trade liberalization have had a minor role in increasing U.S. wage inequality. A minority argues that capital mobility and outsourcing indicate a larger effect. This paper first surveys these views, and then argues that how we understand the policy consequences of trade liberalization helps determine the character our analysis of the issue itself. Thus, a shift in policy perspective, to consider the "equity costs" of trade liberalization in terms of eroded U.S. labor market institutions, produces a larger framework for analyzing the consequences of globalization and trade liberalization than is available in traditional comparative advantage efficiency reasoning. From this wider perspective, trade liberalization has likely had a greater impact on U.S. wage inequality than even the minority mainstream position allows. [ABSTRACT FROM AUTHOR]

Economic inequality is soaring and the consensus in some circles is that corporations' myopic focus on profits is largely to blame. At first glance a stakeholder approach would seem an appealing solution: surely if the purpose of corporations was not wealth maximization for shareholders, but rather to create value for all constituents--thus including employees, customers, suppliers, and communities--we would make strides towards combatting inequality, the theory goes. Corporations themselves, through their powerful lobbying group, the Business Roundtable, recently disclaimed shareholder primacy and embraced stakeholder theory. However, far from successfully redressing inequality, a stakeholder approach is unlikely to achieve meaningful redistribution of power and resources to weaker constituents and would likely work in the opposite direction. We suggest that a stakeholder approach gives corporate executives both a sword and a shield with which to preserve their advantageous status quo. First, executives can justify stepped up lobbying efforts as part of their mandate to consider the interests of all constituents, capturing the agenda with respect to distributing more power and resources to weaker constituents. Second, because a switch to a stakeholder approach would appear as a significant change--despite not actually accomplishing meaningful redistribution--it would require significant political capital to be adopted, and once adopted would occupy an outsized portion of legislative and regulatory space, depleting energy and resources necessary to pass reform that is more likely to actually impact inequality. In fact, in reviewing the likely drivers of inequality, we find that key factors include higher concentration leading to the shrinking of the labor share and increased monopsony in labor markets, the gradual weakening of worker protections from labor market institutions, and giving up on progressive taxation as a redistributive mechanism. Broadening corporate purpose alone would do next to nothing to impact these fields, so to address rampant economic inequality corporate scholars will need to eschew the academic silo and reach across disciplines to identify more effective policies. [ABSTRACT FROM AUTHOR]

This paper critically assesses the empirical evidence on the relationship between immigration and African American employment. Studies using various methodologies and data are reviewed: natural experiments, time series, and cross-sectional studies of local labor markets and intertemporal changes in the national labor market. We find that for African Americans as a whole, immigration may have little effect on mean wages and probability of employment. However, there is some evidence that immigration may have had an adverse impact on the labor market outcomes of African Americans belonging to low education-experience groups. However, even this modest conclusion must be qualified: the literature has many unresolved econometric issues that might easily undermine the received wisdom. [ABSTRACT FROM AUTHOR]

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 weighted 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. [ABSTRACT FROM AUTHOR]

This article tests whether places with higher exposure to unionization during the 1940s, due to their pre‐existing industrial composition, tended to have larger declines in wage inequality, conditional on local economic and demographic observables and regional trends. We find a strong negative correlation between exposure to unionization and changes in local inequality from 1940–50 and 1940–60. This does not appear to be underpinned by skill‐specific sorting of workers or by firms leaving places with high exposure to unionization. We also find that the correlation between exposure to unionization in the 1940s and the change in inequality after 1940 persists in long‐difference regressions to the end of the twentieth century. [ABSTRACT FROM AUTHOR]

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This article is concerned with the measurement of jobless recoveries and the elements that may explain their emergence. We first introduce a measure that maps the various elements that define a jobless recovery into a single number that we label the jobless recovery depth. We then construct a database of 389 state-level observations and study the cross-sectional variations that emerge. We find that jobless recoveries in the United States are not a nation-wide phenomena, but a local event confined within a cluster of states that expands slowly between 1975 and 2015. We find the state-level evidence to be consistent with theories that link jobless recoveries to unusually long expansionary periods, less dynamic labor markets, and the advent of the great moderation. The evidence is not consistent with theories that link them to decreases in union power, increases in income inequality, or increases in health care costs. [ABSTRACT FROM AUTHOR]

As the recent economic crisis has demonstrated, inequality often spans credit and labor markets, supporting a system of cumulative disadvantage. Using data from the National Longitudinal Survey of Youth, this research draws on stigma, cumulative disadvantage and status characteristics theories to examine whether credit and labor markets intersect through the event of bankruptcy to disadvantage certain individuals over time. The transmission of bankruptcy's stigma across markets occurs in a specific legal setting where, even though the current U.S. Bankruptcy Code grants bankrupters a fresh start through debt forgiveness, the Fair Credit Reporting Act limits bankrupters' ability to begin anew because it permits employers to access credit reports. My findings highlight these ambiguities and show that, net of their previous labor market statuses, bankrupters spend less time working and have lower earnings than nonbankrupters. Thus, having become bankrupt exposes people to subsequent disadvantage in the labor market. [ABSTRACT FROM PUBLISHER]

The article discusses race, segregation and concentrated poverty in the U.S. through an examination of the country's geography, including cities, suburbs and rural small towns. The impact that the Global Financial Crisis of 2008-2009 had on the socioeconomic conditions of ethnic and racial minority neighborhoods is discussed. An overview of the relationship between spatial inequality, which is also referred to as the "geography of inequality," socioeconomic mobility and access to labor markets, is discussed.

From 1973 to 2007, private sector union membership in the United States declined from 34 to 8 percent for men and from 16 to 6 percent for women. During this period, inequality in hourly wages increased by over 40 percent. We report a decomposition, relating rising inequality to the union wage distribution’s shrinking weight. We argue that unions helped institutionalize norms of equity, reducing the dispersion of nonunion wages in highly unionized regions and industries. Accounting for unions’ effect on union and nonunion wages suggests that the decline of organized labor explains a fifth to a third of the growth in inequality—an effect comparable to the growing stratification of wages by education. [ABSTRACT FROM PUBLISHER]

The article explores the connection between isolation from job opportunities and the persistence of gender and racial inequalities in U.S. society. The authors utilize survey data to suggest that a significant white male advantage over white women and Hispanics in number of job leads. The role of social networks and social capital in sustaining this advantage is discussed. Inequality in the receipt of job information is tied to high levels of supervisory authority. Other topics include minorities in the labor market, civil rights, and equal opportunity.

The goal of this article is to summarize the main trends in the earnings and employment distribution in the United States using data drawn from the March Current Population Surveys covering the period between 1961 and 2002. We show that inequality started to increase for men in 1974, and for women in 1981, and for both genders inequality continued to increase throughout 2002. During the same period the wage premium of college graduates over noncollege workers increased substantially and the ratio of college educated workers to non-college workers also increased. These facts support the popular skill-biased technical change (SBTC) hypothesis. However, other facts raise some doubts about the SBTC hypothesis. First, the college wage premium is mainly due to workers with a postgraduate degree, but their increase in the labor force started much earlier than the spectacular rise in their wages. Also there has been no marked change in recent decades in the occupational distribution of workers. However, the earning premium of professional over blue collar workers followed the same trend as the college earning premium. And finally, the most dramatic changes in the labor market took place among women. [ABSTRACT FROM AUTHOR]

Presents a study that examined why job histories differ, with particular focus on how the use of social contacts reinforces and reproduces inequality for low-income women in San Francisco, California. Discussion on variation within the labor market segment; Information on the factors that affect job search; Background on human capital theory.

Most research on earnings inequality has focused on the growing gap between workers of different races and at different education, age, and income levels, but a large portion of the increasing inequality has actually occurred within these groups. This article focuses on the extent and sources of "within-group" wage inequality in more than 500 labor markets in the United States in 1990. In addition to documenting that within-group wage inequality across regions varies more widely today than over the past several decades, the analysis reveals that two frequently cited explanations of rising wage inequality over time have little impact on within-group wage inequality when measured at the local labor market level: (1) industrial shifts and (2) increased technology and trade. By contrast, flexible and insecure employment conditions (e.g., unemployment, contingent work, and immigration) are associated strongly with high local levels of within-group wage inequality, especially among women. [ABSTRACT FROM AUTHOR]

The decline in the unskilled share of French employment is chiefly due to the slackness of domestic demand for those industries with the highest proportion of unskilled workers. The spread of computers has not been particularly conducive to substitution between skilled and unskilled labor. We test and accept the hypothesis of technical-progress neutrality within French industries. The mechanisms that generate inequality do not appear to be the same in France and in the United States. The source of inequality isn't so much technical progress per se as its interaction with the institutions that regulate the labor market. [ABSTRACT FROM AUTHOR]

Discusses the changing inequality in the United States labor market. Factors which would affect the changes in the distribution of wages; Examination on the inequality of work timing; Explanation on the inequality in risk of injury.

Traditional cross-sectional measures find greater inequality in the United States than in industrialized Western European countries, but are unable to distinguish transitory from permanent inequality. With longitudinal data, we measure cross-sectional inequality during the 1980s using the Shorrocks measure of income stability to find the degree to which single-period measures exaggerate permanent inequality. Surprisingly, given the smaller social welfare system and the less restrictive labor markets in the United States, we find that both single-period inequality and the share of that inequality that persists over time are greater in the United States than in Germany. [ABSTRACT FROM AUTHOR]