American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Changes in Between-Group Inequality: Computers, Occupations, and International Trade
American Economic Journal: Macroeconomics
vol. 11,
no. 2, April 2019
(pp. 348–400)
Abstract
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.Citation
Burstein, Ariel, Eduardo Morales, and Jonathan Vogel. 2019. "Changes in Between-Group Inequality: Computers, Occupations, and International Trade." American Economic Journal: Macroeconomics 11 (2): 348–400. DOI: 10.1257/mac.20170291Additional Materials
JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- J16 Economics of Gender; Non-labor Discrimination
- J22 Time Allocation and Labor Supply
- J23 Labor Demand
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials