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Earnings inequality and skill mismatch in the U.S: 1973-2002

This paper shows that skill mismatch is a significant source of inequality in real earnings in the U.S. and that a substantial fraction of the increase in wage dispersion during the period 1973–2002 was due to the increase in mismatch rates and mismatch premia. In 2000–2002, surplus and deficit qual...

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Published in:	Journal of economic inequality 2013-06, Vol.11 (2), p.163-194
Main Author:	Slonimczyk, Fabián
Format:	Article
Language:	English
Subjects:	Bildungsertrag Decomposition Development Economics Economic Growth Economic theory Economics Economics and Finance Education Einkommensunterschied Hypotheses Income distribution Income inequality Inequality International Economics Labor market Mismatch Overqualification Political Science Public Finance Qualifications Qualifikation Skilled workers Skills Studies Unterqualifikation Unterwertige Beschäftigung Ursache USA Wage differential Wages & salaries Überqualifikation
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description	This paper shows that skill mismatch is a significant source of inequality in real earnings in the U.S. and that a substantial fraction of the increase in wage dispersion during the period 1973–2002 was due to the increase in mismatch rates and mismatch premia. In 2000–2002, surplus and deficit qualifications taken together accounted for 4.3 and 4.6% of the variance of log earnings, or around 15% of the total explained variance. The dramatic increase in over-education rates and premia accounts for around 20 and 48% of the increase in the Gini coefficient during the 30 years under analysis for males and females respectively. The surplus qualification factor is important in understanding why earnings inequality polarized in the last decades.
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subjects	Bildungsertrag Decomposition Development Economics Economic Growth Economic theory Economics Economics and Finance Education Einkommensunterschied Hypotheses Income distribution Income inequality Inequality International Economics Labor market Mismatch Overqualification Political Science Public Finance Qualifications Qualifikation Skilled workers Skills Studies Unterqualifikation Unterwertige Beschäftigung Ursache USA Wage differential Wages & salaries Überqualifikation
title	Earnings inequality and skill mismatch in the U.S: 1973-2002
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