J. Dinardo et al., LABOR-MARKET INSTITUTIONS AND THE DISTRIBUTION OF WAGES, 1973-1992 - A SEMIPARAMETRIC APPROACH, Econometrica, 64(5), 1996, pp. 1001-1044
Citations number
39
Categorie Soggetti
Economics,"Social Sciences, Mathematical Methods","Mathematical, Methods, Social Sciences","Statistic & Probability","Mathematics, Miscellaneous
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. Th
e procedure provides a visually clear representation of where in the d
ensity of wages these various factors exert the greatest impact. Using
data from the Current Population Survey, we find, as in previous rese
arch, 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 decl
ine in the real value of the minimum wage explains a substantial propo
rtion 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.