Report | Wages, Incomes, and Wealth

Wage Inequality in the 1990s

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Much of the recent discussion of wage inequality draws exclusively on research and trends related to the 1980s. This is partly due to the lag between conducting research and actual publication. However, the continued focus on the 1980s is frequently based on the unexamined assumption that the pattern of wage growth prevailing in the 1980s
continues in the 1990s. Another possible reason for relying on 1980’s data is that various changes in the Current Population Survey, according to some analysts, have made it difficult to identify wage trends in the 1990s (Lerman 1997; Katz and Autor 1998).

This paper examines wage inequality trends in the 1990s using the CPS and assesses the sensitivity of measured trends to the choice of methods to deal with changes in the CPS, particularly changes in education coding and top-coding. We then contrast the trends of the 1990s and the 1980s and draw some implications for our understanding of wage inequality.

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