Rising Wage Inequality: The United States versus Other Advanced Countries
Author(s)
Freeman, Richard B.; Katz, Lawrence
Abstract
Earnings inequality grew most rapidly in the 1980s in the United States and the United Kingdom. Other advanced countries generally had modest increases in inequality, and a few apparently had no change. This article argues that the familiar forces of supply and demand are important in wage determination, but had similar effects on all countries, and hence cannot explain most international differences in inequality. Institutional differences, on the other hand, have a clear relationship to the international patterns of inequality.
