Essays on the Economics of Wage Inequality

Abstract

In this dissertation I examine changes in wage inequality in two chapters. In the first chapter, I examine the slowdown in the relative demand for college-educated labor in the U.S. since the early 1980s. A large literature suggests that this puzzling slowdown is primarily the result of non-monotone changes in the demand for skill, particularly since the mid-1990s, induced by the introduction of computers to the labor market. In these two essays, I develop a complementary result: I show that roughly 10-60% of the gap in the annual growth rates of the relative demand for college-educated workers between the 1963-1982 and 1982-2008 periods can be closed by adjusting for shifts in supply and demand within schooling groups; however, a slowdown in relative demand growth beginning in 1993, well-documented in the literature and potentially-related to recent technological changes, remains pronounced across all specifications.