Matching Items (2)
Description
This paper entitled "An Analysis of Wage Stagnation and Inequality over the Past Half Century" is a literature review that examines and analyzes three main studies by Robert Lawrence, David Card and John DiNardo, and the Economic Policy Institute, and uses other works by a variety of economists to supplement that analysis. The paper aims to understand and precisely define the issue of wage stagnation and inequality and distinguish between the two. To do this, the paper looks at which groups are primarily affected, the different types of inequality that exist, in which time periods those types of inequality operate, any potential causes of the issue, and any potential solutions. The studies all agree that wage stagnation and inequality exist and each looks at middle earners \u2014 one looks at blue-collar workers and the other two choose the median earner \u2014 either way, the focus of the studies are those earners in the middle of the earnings distribution. Each study varies in its focus of the potential causes and solutions to the issue. Robert Lawrence, an international trade theorist, looks at the problem of wage stagnation and inequality through the lens of globalization and specifically if free trade is a key contributor. David Card, a labor economist, and John DiNardo look at the issue through the lens of technology change, specifically the Skills-Biased-Technological Change (SBTC) Hypothesis and question if technological advances are what caused this stagnation and inequality. The Economic Policy Institute, a left-leaning think tank, look at this issue through the lens of policy and question if poor policy regimes over the past half century have allowed wage stagnation and inequality to thrive. Overall, the three studies examined are similar enough in time period and subject studied, yet different enough in the lens through which the issue is viewed to provide a well-rounded summary and analysis of current literature by prominent economists on wage stagnation and inequality.
ContributorsFeldman, Rachel Erin (Author) / Mendez, Jose (Thesis director) / Hill, John (Committee member) / School of International Letters and Cultures (Contributor) / Department of Economics (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
These essays attempt to explore how technological change, technology diffusion and economic distortions shape the aggregate economy. The first chapter empirically documents that wage inequality within the group of skilled workers in the U.S. has significantly widened since 2000 and that the changing trend of wage inequality was entirely driven by the non-routine analytic occupation. The model I build demonstrates that the task allocation induced by investment- specific technical change can widen the within-group wage inequality because of the “composition effect”. The quantitative results provide a well-matched timing and magnitude of the non-linear expansion path in wage inequality that is observed in the data. In chapter two I explore the role human capital plays in the convergence of Asian growth miracles. I incorporate the idea that education could facilitate technology diffusion into a growth framework by developing a model of human capital investment, adding a role for human capital in the convergence of productivities towards the technology frontier. I then calibrate my model to the South Korea between 1960 and 2019. My model can remarkably match the ‘S Shaped’ convergence trajectory in South Korea well. More importantly, the quantitative exercises demonstrate that a significant extent of the externality is required to match the transition path of output in South Korea. A series of quantitative experiments suggest that if the externality is removed from the model, then it cannot quantitatively match South Korea’s convergence pattern well. Chapter three documents a fact that that firms in developing economies face both financing constraints and face size-dependent distortions. The two distortions, however, affect firms in opposite ways. I build a model showing that the adverse effects associated with size-dependent distortions drastically reduce, and may even reverse, if firms also face financing constraints. This occurs because the misallocation effects of the two may offset each other. The quantitative analysis shows that size- dependent distortions estimated from data lead to up to 25 percent of output drop if they are implemented alone, but have virtually no effect on aggregate output in the presence of empirically relevant capital financing constraints.
ContributorsQian, Long (Author) / Ventura, Gustavo (Thesis advisor) / Brooks, Wyatt (Thesis advisor) / Vereshchagina, Galina (Committee member) / Arizona State University (Publisher)
Created2023