A longitudinal examination of earnings inequality and mobility among young, full-time workers in the United States (original) (raw)
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Inequality and mobility: trends in wage growth for young adults
1998
After two decades of rising wage inequality, it is important to examine the impact of these changes on lifetime wage growth. This paper compares the intragenerational mobility of two NLS cohorts of young white men: the first entered the labor market in the late 1960s, the second in the early 1980s. For each cohort, we analyze wage profiles across 16 years using a mixed-effects model. We find that long-term wage growth has both stagnated and become more unequal in recent years. Changes in the composition of and returns to education, experience, occupation and other covariates explain about half the rise in inequality, leaving a significant residual. Our findings suggest a decline in the economic welfare of workers who entered the labor market in the 1980s.
Inequality and Mobility: Trends in Wage Growth for Young Adults. IEE Working Paper No. 7
1998
After two decades of rising wage inequality, it is important to examine the impact of these changes on lifetime wage growth. This paper compares the intragenerational mobility of two NLS cohorts of young white men: the first entered the labor market in the late 1960s, the second in the early 1980s. For each cohort, we analyze wage profiles across 16 years using a mixed-effects model. We find that long-term wage growth has both stagnated and become more unequal in recent years. Changes in the composition of and returns to education, experience, occupation and other covariates explain about half the rise in inequality, leaving a significant residual. Our findings suggest a decline in the economic welfare of workers who entered the labor market in the 1980s.
The research program of the Center for Economic Studies (CES) produces a wide range of economic analyses to improve the statistical programs of the U.S. Census Bureau. Many of these analyses take the form of CES research papers. The papers have not undergone the review accorded Census Bureau publications and no endorsement should be inferred. Any opinions and conclusions expressed herein are those of the author(s) and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. Republication in whole or part must be cleared with the authors. To obtain information about the series, see www.census.gov/ces or contact J.
Earnings inequality narrows for young workers despite a widening wage structure
The Quarterly Review of Economics and Finance, 1995
InequaliQ of wage rates has widened ln the United States. But inequality of earnings also depends on the distribution of hours worked. If the dzstributzon of hours contracts suficiently, earnings ine-qua&y may narmul despzte a wzdening wage structure. The present study examines recent trends in rnequaltty for young workers and, consistent with the preceding scenario, finds that rzszng znequality of wage rates has been ovenohelmed by declinzng inequalzty of hourc worked. As a consequence, earnings inequalzty of young workers declined during the 1980s.
The Rise in Lifetime Earnings Inequality Among Men
SSRN Electronic Journal, 2000
Recent trends in lifetime earnings inequality in the United States have been barely explored, despite the fact that lifetime earnings are a better measure of access to resources than the more widely studied annual earnings. This paper demonstrates that lifetime earnings inequality has increased over the past 30 years. We first explore how starting wages and wage growth have changed over time and link the changes to trends in lifetime earnings and the lifetime skill-premium. We then calculated a broader measure of lifetime earnings inequality and show that since the late 1960s, lifetime earnings inequality has increased by a third. Between the late 1960s and mid-1970s a rise in within-education-group inequality more than accounts for the increase; since then the growth in between-educationgroup inequality, accounted for a majority of the rise. These results are consonant with the data on starting wages and wage growth. Finally, we show that the increase in inequality has been largely driven by greater dispersion in hourly wages, although declining hours of work among low-education young men did play a role. The analysis uses data from the March Current Population Survey as well as matched CPS data. Thus we demonstrate how repeated cross-sections and short panels of data can be used to examine issues usually reserved for long panels.
Inequality in Earnings at the Close of the Twentieth Century
Annual Review of Sociology, 1999
▪ Median income in the United States has fallen and the distribution of income has grown markedly more unequal over the past three decades, reversing a general pattern of earnings growth and equalization dating back to 1929. Median trends were not the same for all groups—women's earnings generally increased—but the growth in earnings inequality has been experienced by all groups. Even white men employed full-time, year-round—traditionally the most privileged and secure group—could not escape wage stagnation and polarization. These patterns suggest research questions that go beyond conventional sociological interest in racial and gender wage gaps, refocusing attention on more general changes in labor market dynamics. The debates over the origins of the rise in US inequality cover a wide range of issues that can be roughly grouped into four categories: the changing demographics of the labor force, the impact of economic restructuring, the role of political context and institutio...
Income Mobility in the United States
The Park Place Economist, 2016
This study makes use of the National Longitudinal Survey of Youth (NLSY) in order to examine the relationship between the standard of living one experiences as a youth and their income as an adult. Human capital theory, as well as previous empirical research in economics suggests that as standard of living as a youth increases, future income as an adult should increase as well. The 1979 cohort as well as the 1997 cohort of the NLSY were studied in order to provide insight into how the relationship in question has changed over time. I hypothesize that as standard of living as a youth increases, so too will income as an adult. Furthermore I hypothesize that the level of income mobility will be greater for the 1979 cohort than the 1997 cohort.
United States Earnings Dynamics: Inequality, Mobility, and Volatility
NBER Chapters, 2020
Using data from the Census Bureau's Longitudinal Employer-Household Dynamics (LEHD) infrastructure files, we study changes over time and across sub-national populations in the distribution of real labor earnings. We consider four large MSAs (Detroit, Los Angeles, New York, and San Francisco) for the period 1998 to 2017, with particular attention paid to the subperiods before, during, and after the Great Recession. For the four large MSAs we analyze, there are clear national trends represented in each of the local areas, the most prominent of which is the increase in the share of earnings accruing to workers at the top of the earnings distribution in 2017 compared with 1998. However, the magnitude of these trends varies across MSAs, with New York and San Francisco showing relatively large increases with Los Angeles somewhere in the middle relative to Detroit whose total real earnings distribution is relatively stable over the period. Our results contribute to the emerging literature on differences between national and regional economic outcomes, exemplifying what will be possible with a new data exploration tool-the Earnings and Mobility Statistics (EAMS) web application-currently under development at the U.S. Census Bureau. Any opinions and conclusions expressed herein are those of the authors and do not represent the views of the US Census Bureau or other sponsors. All results have been reviewed to ensure that no confidential information is disclosed (DRB clearance number CBDRB-FY20-CED006-0013).
Uncovering the American Dream: Inequality and Mobility in Social Security Earnings Data since 1937
2007
This paper uses Social Security Administration longitudinal earnings data since 1937 to analyze the evolution of inequality and mobility in the United States. Earnings inequality follows a U-shape pattern, decreasing sharply from 1938 to 1953 and increasing afterwards. We find that short-term and long-term mobility among all workers has been quite stable since 1951. Therefore, the pattern of annual earnings inequality is very close to the pattern of inequality of longer term earnings. In particular, uncapped earnings data available since 1978 show that mobility at the top of the earnings distribution has also been very stable and has not mitigated the dramatic increase in annual earnings concentration since 1978. However, the stability in earnings mobility among all workers masks substantial heterogeneity across demographic groups. The decrease of the gender gap in earnings started in the late 1960s and was present for all cohorts in the labor force at the time although stronger for young women. It has been taking place throughout the distribution, including the very top, and has contributed greatly to reducing long-term inequality and increasing long-term mobility among all workers. This is the driving force behind the relative stability of overall mobility measures which mask declines in mobility among men. In contrast, overall inequality and mobility patterns are not significantly influenced by the changing size and structure of immigration nor by changes in the black/white earnings gaps. 1 Edlund and Kopczuk (2007) argue that an increase in intergenerational mobility at the top of the distribution explains this pattern. 2 The SSA Master Earnings File (MEF) contains employee-level information for the full population since 1951 and employee-employer level (W-2) information since 1978. Starting in 1978, our data can be thought of as 1% research extracts from the MEF. Prior to 1978, it contains some information not available in the MEF and pre-1951 information is not part of the MEF. 3 The only study we found was Leimer (2003). The existence of the pre-1951 electronic micro data seems to be unknown to academic researchers. Social Security Administration (1937-1952) provided detailed annual statistical reports on reported earnings before the data were put in electronic format. 4 However, in those matched data studies, the SSA data before 1978 was always top-coded at the Social Security cap making it impossible to study the top half of the distribution. To our knowledge, the quarterly earnings information is not stored in the administrative SSA database and it seems to have been retained only in the 1% sample since 1957 and in the 0.1% sample since 1951 that we are using in this study. 5 Leonesio and Del Bene (2006) have recently used SSA data since 1951 to analyze lifetime inequality. They use, however, top-coded earnings data. Congressional Budget Office (2007) also use (uncapped) SSA data since 1981 and focus on short-term mobility and earnings instability.