Polarization and Rising Wage Inequality: Comparing the U.S. And Germany

By Dirk Antonczyk, Thomas DeLeire, Bernd Fitzenberger. Social Science Research Network, 2018

161 citations recorded by the source corpus.

This paper compares trends in wage inequality in the U.S. and Germany using an approach developed by MaCurdy and Mroz (1995) to separate age, time, and cohort effects. Between 1979 and 2004, wage inequality increased strongly in both the U.S. and Germany but there were various country specific aspects of this increase. For the U.S., we find faster wage growth since the 1990s at the top (80% quantile) and the bottom (20% quantile) compared to the median of the wage distribution, which is evidence for polarization in the U.S. labor market. In contrast, we find little evidence for wage polarization in Germany. Moreover, we see a large role played by cohort effects in Germany, while we find only small cohort effects in the U.S. Employment trends in both countries are consistent with polarization since the 1990s. We conclude that although there is evidence in both the U.S. and Germany which is consistent with a technology-driven polarization of the labor market, the patterns of trends in wage inequality differ strongly enough that technology effects alone cannot explain the empirical findings.

Subfields: Demography, Economics and Econometrics, General Health Professions

View Paper: https://www.semanticscholar.org/paper/fca460ab6c40071697fd2ba267f88db1042f1b0e

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Citations in the corpus

Understanding Rising Income Inequality in Germany, 1999/2000–2005/2006 (2012, background): “Daly, M. C. and R. G. Valetta, “Inequality and Poverty in the United States: The Effects of Changing Family Behavior and Rising Wage Dispersion,” Economica, 73, 75–98, 2006.”
The Great Recession and the Distribution of Household Income (2013, methodology): “Antonczyk et al. (2010) argue that the general increase in wage inequality could also partly be explained by cohort effects and institutional changes in Germany, the latter being of particular relevance for low-skilled workers. An overview of a number of empirical studies investigating wage inequali”
The “task approach” to labor markets: an overview (2013, background): “(2009), Antonczyk et al. (2009), Black and Spitz-Oener (2010), and Gathmann and Schönberg (2010), along with other recent studies that are too numerous to list here, used the job activity questions in the IAB/BIBB data to measure job tasks and explore links between technological change, changes in t”
Automation, skills use and training (2018, methodology): “The estimates for Germany and Greece are unreliable, hence not shown here.”
Putting Tasks to the Test: Human Capital, Job Tasks, and Wages (2013, unknown): “Subsequent work by Autor, Katz, and Kearney ð2006, 2008Þ, SpitzOener ð2006Þ, Bartel, Ichniowski, and Shaw ð2007Þ, Felstead et al. ð2007Þ, Goos and Manning ð2007Þ, Smith ð2008Þ, Dustmann, Ludsteck, and Schönberg ð2009Þ, Antonczyk, DeLeire, and Fitzenberger ð2010Þ, Black and Spitz-Oener ð2010Þ, Gathm”