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Inequality: What are the facts?

Inequality: What are the facts?. Econ 4372 Dr. Juhn. 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. Primer on Wage Distributions.

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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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