
handle: 10419/111242
This paper provides an explanation for part of the increasing wage inequality between the mid-1970s and 2010 by showing that the top deciles of college earners' significant relative wage growth is underpinned by the link between ex ante math ability, math-heavy college majors and highly quantitative occupations. This mechanism is further strengthened on the supply-side by a strong and accelerating shift away from math-heavy college majors and occupations for successive cohorts. We develop a general equilibrium model with multiple education options, where occupational outcomes depend on individuals' ex ante math abilities and study preferences. This research shows that a large portion of wage inequality is determined by initial math/quantitative abilities. Furthermore, these results imply that policy measures aimed at increasing college enrollment, to decrease wage inequality, do not address the underlying process and, in some cases, may exacerbate wage inequality.
Lohnstruktur, Lohn, I24, J24, ECON Department of Economics, mathematics abilities, Wage inequality, 10007 Department of Economics, Wage inequality, SBTC, college majors, occupations, mathematics abilities, J31, ddc:330, wage inequality, occupations, Verteilungsgerechtigkeit, Honorar, Diskriminierung, 330 Economics, Vergütung, college majors, Einkommensverteilung, Mathematik, Gehalt, E24, I20, E25, Lohngleichheit, Einkommensunterschied, Bildung, E20, SBTC, jel: jel:E20, jel: jel:E25, jel: jel:E24, jel: jel:I20, jel: jel:J24, jel: jel:I24, jel: jel:J31
Lohnstruktur, Lohn, I24, J24, ECON Department of Economics, mathematics abilities, Wage inequality, 10007 Department of Economics, Wage inequality, SBTC, college majors, occupations, mathematics abilities, J31, ddc:330, wage inequality, occupations, Verteilungsgerechtigkeit, Honorar, Diskriminierung, 330 Economics, Vergütung, college majors, Einkommensverteilung, Mathematik, Gehalt, E24, I20, E25, Lohngleichheit, Einkommensunterschied, Bildung, E20, SBTC, jel: jel:E20, jel: jel:E25, jel: jel:E24, jel: jel:I20, jel: jel:J24, jel: jel:I24, jel: jel:J31
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