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Inequality: What are the facts?

Delve into the facts and figures of wage distribution, from skewed distributions to income shares over time. Explore wage gaps, changes in wage structures, and international trends to understand the dynamics of inequality.

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Inequality: What are the facts?

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  1. Inequality: What are the facts? Econ 4372 Dr. Juhn

  2. Wage Distribution • Some workers earn more than others • The wage distribution is positively skewed (long right tail) • A small percent of workers earn disproportionately large shares of the rewards for work

  3. Primer on Wage Distributions • Mean or Average • Median • Percentiles • Variance • Standard Deviation • 90-10 Ratio • Lorenz curve or Gini Coefficient

  4. International Trends in Wage Inequality

  5. FIGURE 1 The Top Decile Income Share, 1917-2008

  6. FIGURE 2 Decomposing the Top Decile US Income Share into 3 Groups, 1913-2008

  7. FIGURE A1 Average Real Income of bottom 99% and top 1% in the United States, 1913-2008

  8. FIGURE 8 The Top Decile Wage Income Share, 1927-2008

  9. FIGURE 12 Top 0.1% Income Shares in the U.S., France, and the U.K.,1913-2007

  10. FIGURE 11 CEO Pay versus Average Wage Income, 1970-2006

  11. Wages, Earnings, Income and Wealth • Wages = Price of Labor • Earnings = Wage* Hours (incorporates labor supply) • Compensation includes earnings and other benefits • Income includes transfers and non-earned income • Family income incorporates changes in family composition • Wealth (stock) incorporates savings and intergenerational transfers

  12. Changes in the wage structure – the 1980s • The wage gap between those at the top of the wage distribution and those at the bottom widened dramatically • Wage differentials widened among education groups, experience groups, and age groups • Wage differentials widened within demographic and skill groups

  13. Changes in the wage structure – 1990s, 2000s • The wage gap between median and bottom began to stabilize • However, the gap between median and top continue to grow • Recently, wage inequality at the top of the distribution increased to levels not seen since the Depression • Only the high skilled/high wage workers have continued to do well in the 2000s

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