Modeling Wage Inequality in the U.S. As Conditional Variation: A Time Series Approach

Journal of Income Distribution

Posted: 28 Jul 1998

See all articles by Lonnie K. Stevans

Lonnie K. Stevans

Hofstra University - Frank G. Zarb School of Business

Abstract

In this paper, we argue that wage volatility is a good proxy for wage inequality because of the strong and lagged correlation between the two. For seven industry categories, inequality is modeled as a conditional variance process over the period 1964-1988. It is modified to allow for explanatory variables that have a robust theoretical basis for inclusion as determinants of wage inequality. One of the major findings is the identification of the major contributors to rising U.S. wage inequality in the 1980s: the declining real value of the minimum wage, the loss of collective bargaining gains by labor, and immigration.

JEL Classification: C5, D31, J38

Suggested Citation

Stevans, Lonnie K., Modeling Wage Inequality in the U.S. As Conditional Variation: A Time Series Approach. Journal of Income Distribution, Available at SSRN: https://ssrn.com/abstract=97348

Lonnie K. Stevans (Contact Author)

Hofstra University - Frank G. Zarb School of Business ( email )

Department of IT/QM
134 Hofstra University
Hempstead, NY 11549
United States
516-463-5375 (Phone)

HOME PAGE: http://www.lonniestevans.com

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