Why has wage inequality increased more in the USA than in Europe?
Author InfoDaniel Fernandez Kranz Abstract During the past two decades the wage gap between high and low skill labour has increased more in the USA than in many European countries. In this paper, the correspondence between occupation and education is used to construct aggregates of skill supply, skill demand and unemployment by skill group that are comparable across countries. Using individual data for years 1983–1994, it is found that the relative demand for skilled labour has increased to a similar extent in the USA and in Europe and that wage inequality remained low in Europe partly because the European relative supply of skill increased much faster than in the USA, and partly because European relative wages were rigid, which caused an increase in unemployment among the low-skilled. Download InfoTo download: If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below
