We provide a unifying framework to quantify the impact of several determinants of changes in US between-group inequality. We use an assignment framework with many labor groups, equipment types, and occupations in which changes in inequality are driven by changes in workforce composition, occupation demand,
computerization, and labor productivity. We parameterize the model using direct measures of computer usage within labor group-occupation pairs and quantify the
impact of each shock for various dimensions of between-group inequality between 1984 and 2003. We find, for example, that computerization and shifts in occupation
demand jointly account for roughly 80 percent of the rise in the skill premium, with computerization alone accounting for roughly 60 percent. In an open-economy
extension of the model, we show how computerization and changes in occupation demand can be caused by changes in the extent of international trade and perform
counterfactual exercises to quantify these effects.
Burstein, Ariel, Eduardo Morales, and Jonathan Vogel.
"Changes in Between-Group Inequality: Computers, Occupations, and International Trade."
American Economic Journal: Macroeconomics,
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Economics of Gender; Non-labor Discrimination
Time Allocation and Labor Supply
Human Capital; Skills; Occupational Choice; Labor Productivity
Wage Level and Structure; Wage Differentials