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Journal of Economic Perspectives: Vol. 11 No. 2 (Spring 1997)

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Institutional Changes and Rising Wage Inequality: Is There a Linkage?

Article Citation

Fortin, Nicole M., and Thomas Lemieux. 1997. "Institutional Changes and Rising Wage Inequality: Is There a Linkage?" Journal of Economic Perspectives, 11(2): 75-96.

DOI: 10.1257/jep.11.2.75

Abstract

In this paper, the authors analyze the role of three institutional changes--the decline in the real value of the minimum wage, deunionization, and economic deregulation--on the rise in wage inequality in the United States during the 1980s. They argue that about a third of the increase in male and female wage inequality can be traced to these institutional changes. Deunionization had a significant effect on the rise in inequality for men, while the minimum wage is what matters most for women. The authors find the direct impact of economic deregulation to be comparatively small.

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Authors

Fortin, Nicole M. (U Montreal and CIRANO)
Lemieux, Thomas (U Montreal, CIRANO, and NBER)

JEL Classifications

J31: Wage Level and Structure; Wage Differentials

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