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  5. Changes in Earnings Inequality: The Role of Demand Shifts

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Changes in Earnings Inequality: The Role of Demand Shifts

  • George E. Johnson
Journal of Economic Perspectives
vol. 11, no. 2, Spring 1997
(pp. 41–54)
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Abstract

That the relative demand for labor in the upper segment of the skill distribution has been shifting is a widely accepted 'stylized fact' in the literature on the increase in earnings inequality that has occurred since the late 1970s. Explanations of the causes of the relative demand shifts range from effects of increased integration of the world economy to skill-based technological change (reflecting, in part, the computerization of production processes). However, relative demand for skilled labor has been increasing fairly steadily since 1940, a fact having implications about the causes of both the demand shifts and recent increases in inequality.

Citation

Johnson, George, E. 1997. "Changes in Earnings Inequality: The Role of Demand Shifts." Journal of Economic Perspectives, 11 (2): 41–54. DOI: 10.1257/jep.11.2.41

JEL Classification

  • J31 Wage Level and Structure; Wage Differentials
  • J23 Labor Demand
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