Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality

Supply-side factors may contribute to rising wage inequality. First, certain changes in the supply of skills allegedly exacerbate wage inequality. Women's increased labor force participation and increased immigration are the leading candidates; both allegedly reduce the wages of less-skilled me...

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Bibliographic Details
Published inThe Journal of economic perspectives Vol. 11; no. 2; pp. 55 - 74
Main Author Topel, Robert H.
Format Journal Article
LanguageEnglish
Published Nashville, Tenn American Economic Association 01.04.1997
Subjects
Demand
Human capital
Immigration
Income inequality
Labor demand
Labor markets
Labor supply
Relative wages
Skilled labor
Supply
Supply and demand
Symposium: Wage Inequality
Wage differential
Wages
Women
Workforce
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Summary:Supply-side factors may contribute to rising wage inequality. First, certain changes in the supply of skills allegedly exacerbate wage inequality. Women's increased labor force participation and increased immigration are the leading candidates; both allegedly reduce the wages of less-skilled men. However, immigration's impact on wage inequality has been minor and the effects of women's participation is inconclusive. Second, in evaluating the likelihood that human capital investment will mitigate future inequality, evidence suggests that rising returns to education have increased the proportion of young people attending college, limiting the growth of inequality among high-wage workers.
ISSN:0895-3309
1944-7965
DOI:10.1257/jep.11.2.55