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Effects of industry growth and decline on gender and education wage gaps in the 1980s.

By Paul J. Devereux

Abstract

The author uses longitudinal data to study the effects of industry growth and decline on wage changes between 1976 and 2001. He finds that over this period, workers who were initially in industries that subsequently expanded enjoyed faster wage growth than other workers. Moreover, wage growth was strongly related to employment changes in industries the individual was likely to move to: that is, workers' wage growth tended to be relatively fast if their skills suited them for entry into rapidly expanding industries, whether or not they actually moved between industries. The author uses the estimates to evaluate the effects of industry demand changes on within-cohort relative wages during the 1980s. He finds that changes in industrial composition can account for most of the within-cohort increase in the wages of women relative to men and about 30-50% of the increase in the relative wages of more educated groups within cohorts.Industry growth and decline; Gender wage gap; Education wage gap; Worker skills and wages; Industrial composition;Economic development; Wages--Effect of education on; Wages--Sex differences;

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