Earnings and Income Inequality in the United States

This article explores the relationship between technological change and income inequality in the United States since the late 1960s. The analysis focuses primarily on patterns and trends in the dispersion of various distributions of earnings and income during this recent period of rapid technological progress. The authors review relevant literature and perform several empirical analyses using microdata from the March Current Population Surveys from 1968 to 1986. They find little empirical evidence that earnings inequality measured across individual workers has increased since the late 1960s and even less evidence that any changes that have occurred have resulted from the effect of technological change on the demand for labor. On the other hand they find evidence of an increase since the late 1960s in the inequality of total family income measured across families. Moreover much of this increase appears to be due to changes in family composition and labor supply behavior suggesting that the main effects of recent technological change on inequality have been supply-side in nature. (SUMMARY IN FRE AND SPA) (EXCERPT)