This study investigates the relationship between occupational skills and wages in Thailand using the Labour Force Survey from 1985 to 2020. We quantify the contribution of changes in the skill requirement and highlight the increase in the return on the ‘brain’ and the decrease in the penalty on ‘brawn’, which helps explain the wage distribution changes across periods. We further explore the polarisation in the labour market and analyse the changes in the wage distribution by applying the decomposition method proposed by Firpo et al (2009). Our results suggest that wage dispersion increases in the top end over the first two time periods but decreases in the third time period, while it continues to decrease in the lower end of the distribution.

This paper empirically investigates wage inequality within the group of skilled workers in the recent four decades in the USA using CPS data and finds evidence that the trend of wage growth of the top and bottom 10th percentile of skilled workers significantly diverged starting from 2000. Using a task-based framework of occupation, I find that the changing trend of wage inequality was entirely driven by one category of occupation, namely the nonroutine analytic occupation. Then, I consider in a model task reallocation between two broad task categories, namely the routine and abstract task, induced by an ongoing investment-specific technical change. In my model, the labor in the routine task is replaced by cheaper machines due to investment-specific technical change, then workers that are less productive in the abstract task enter abstract occupations. As a result, the wage inequality in the abstract task widens because of the reallocation of less productive workers from the routine task to the abstract task, that is, the “composition effect.” In addition, since economic agents tend to postpone the investment in machines after the ongoing investment-specific technical change takes place for a while, the expansion path of wage inequality is not linear but features an acceleration of wage dispersion in the middle of the technical change. The quantitative results suggest that the model is able to provide a well-matched timing and magnitude of the nonlinear expansion path in wage inequality that is observed in the data.

Desde hace algunos años se avanza en investigaciones sobre la evolución, causas y consecuencias de la desigualdad. En ese marco, la desigualdad salarial ha recibido gran atención dadas sus implicancias en relación con las políticas económicas, el crecimiento y el desarrollo. En este artículo se presentan nuevas series y análisis acerca de la desigualdad salarial de género en la industria de la ciudad de Buenos Aires entre 1903 y 1942. Se propone cubrir un área vacante en los estudios del mundo laboral femenino, siempre complejo, y aún más en la primera mitad del siglo XX. Esta aproximación es una aportación a los estudios sobre la desigualdad de género en Argentina, que permitirá comparaciones con otros espacios y regiones.

The rise of flexible employment in advanced democracies has been predominantly studied in the insider-outsider framework of the dualization literature. However, against the background of rising income inequality, it seems questionable to assume that all labor market insiders are equally affected by flexibilization. This paper explores whether flexibilization increases wage inequality among labor market insiders. I argue that flexibilization exposes insiders to a set of wage risks that are concentrated among low- and middle-income insiders, creating downward wage pressure on those insiders. The empirical analysis, covering 22 democracies between 1985 and 2016, finds that the deregulation of non-standard employment is associated with declining wage shares of low-income and middle-income earners, while top earners benefit. These major distributional shifts imply an important qualification of the dualization literature: rather than pitting insiders against outsiders, flexibilization ‘at the margins’ seems to exacerbate divides among insiders.

The transition from Fordism to the knowledge economy in the world’s advanced democracies was underpinned by the revolution in information and communications technology (ict). The introduction and rapid diffusion of ict pushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their own talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; income in the Anglo-Saxon countries remains particularly unequally distributed. To shed new light on this puzzle, the authors carry out a panel data analysis of eighteen oecd countries between 1970 and 2007. Their analysis stands apart from the existing empirical literature by taking a comparative perspective. The article examines the extent to which the relationship between the knowledge economy and income inequality is influenced by national labor market institutions. The authors find that the expansion of knowledge employment is positively associated with both the 90/10 wage ratio and the income share of the top 1 percent, but that these effects are mitigated by the presence of strong labor market institutions, such as coordinated wage bargaining, strict employment protection legislation, high union density, and high collective bargaining coverage. The authors provide robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy.

This paper analyzes the effects of stronger intellectual property rights (IPR) protection in the South on innovation, imitation, the pattern of production, and wage inequality based on a North–South product-cycle model with foreign direct investment (FDI) and skills accumulation. This quality-ladder model features innovative R&D in the North and imitative R&D in the South. Two types of innovations are considered: innovation targeting all products and innovation targeting only imitated products. We find that for both types of innovations, strengthening IPR protection reduces the innovation rate and raises the imitation rate. There is also an increase in the proportion of Northern unskilled labor and a decrease in Northern wage inequality. As for the pattern of production, strengthening IPR protection may reduce the extent of FDI.

In a knowledge-based growth model where skilled workers are used in innovation and production, skill-biased technological change may lower average R&D productivity via an innovation possibilities frontier effect that eliminates scale effects. We show that skill-biased technological change increases the skill premium even if the elasticity of substitution between skilled and unskilled workers is less than two. Trade between developed countries promotes skill-biased technological change, thus raising wage inequality. Trade between developed and developing countries has differing effects: it induces relatively skill-replacing technological change and lowers wage inequality in the developed country but has the opposite effects in the developing country. Finally, we show that trade can stimulate or hurt economic growth.

This paper examines differences in inequality between regions and between sectors of the economy. The growth in overall inequality since the mid-1990s is found to have been driven primarily by that in London (with a smaller difference for the South East and East Anglia) and by that in the financial sector (with a smaller difference for the business activities sector). While these differences for London and the financial sector overlap to some extent, they also have significant separate influences once each other is controlled for. The changes in inequality in the rest of Britain and in the other sectors of the economy are numerically small and statistically insignificant.

We study the influence of wage differential on the emergence of endogenous fluctuations. In this way, we introduce a dual labor market, based on the Shapiro–Stiglitz efficiency wage theory in an overlapping generations model. We show that wage inequality is a source of endogenous fluctuations. Indeed, a sufficiently strong wage differential leads to the occurrence of cycles of period 2 and local indeterminacy. Moreover, in contrast to several existing contributions, these results depend neither on increasing returns to scale nor on the degree of capital–labor substitution.

In the last decades, OECD labor markets faced important labor supply changes with the arrival of women and the cohorts of the baby-boom. Using a survey where workers declare their true employment experience, this paper argues that these supply trends imply more inexperienced workers. It then investigates the consequences of this fact on the skill composition of the labor force, between-groups wage inequality and the level of unemployment. The main result is that a labor market with wage rigidities may not recover from such a temporary labor supply shock: with a younger and less experienced labor force, there is higher unemployment among low-experience workers, they do not accumulate enough on-the-job human capital, this reduces in the long-run the supply of skilled (experienced) workers and the demand for unskilled workers. This intertemporal multiplication of supply shocks generates multiple equilibria, and the rigid economy is stuck to the bad equilibrium even after the shock. In a competitive labor market, in contrast, wage inequality and notably, the wage return to experience becomes higher but there is no persistence of the supply shock.