Trends in U.S.Wage Inequality: Revising the Revisionists. A Replication Study of Autor, Katz, and Kearney (The Review of Economics and Statistics, 2008)

Abstract

This paper successfully replicates Autor et al. (2008) and extends their analysis through 2019. The extension to include an additional 14 years of data underscores their original finding that rising wage inequality was not an episodic event of the 1980s. That being said, overall 90/10 inequality has risen at a slower pace since the 1990s, and the college wage premium and overall residual inequality have plateaued since 2005. The modest upward trajectory in overall inequality is driven by upper-tail 90/50 inequality, which continues to increase considerably for both men and women. Meanwhile lower-tail 50/10 inequality has continued to plateau, a trend begun around 1987. I also find that the composition-adjusted real wages of high-school dropouts have caught up with high-school graduates in recent years. The combination of these findings is consistent with rising polarization in which employment and wages expand for high-wage and low-wage work.