Inequality in labor market outcomes: contrasting the 1980s and earlier decades

The increase in wage inequality during the 1980s was exceptional, but underlying demand and supply conditions showed relatively little contrast compared to previous decades. One possible explanation is that the increased demand for skills during the 1980s was unusually concentrated among the most skilled workers rather than being spread throughout the skill distribution.Education ; Labor market ; Wages

Changes in Relative Wages, 1963-1987: Supply and Demand Factors

A simple supply and demand framework is used to analyze changes in the U.S. wage structure from 1963 to 1987. Rapid secular growth in the demand for more-educated workers, 'more-skilled' workers, and females appears to be the driving force behind observed changes in the wage structure. Measured changes in the allocation of labor between industries and occupations strongly favored college graduates and females throughout the period. Movements in the college wage premium over this period appear to be strongly related to fluctuations in the rate of growth of the supply of college graduates.

The Value of Health and Longevity

We develop an economic framework for valuing improvements to health and life expectancy, based on individuals' willingness to pay. We then apply the framework to past and prospective reductions in mortality risks, both overall and for specific life-threatening diseases. We calculate (i) the social values of increased longevity for men and women over the 20th century; (ii) the social value of progress against various diseases after 1970; and (iii) the social value of potential future progress against various major categories of disease. The historical gains from increased longevity have been enormous. Over the 20th century, cumulative gains in life expectancy were worth over $1.2 million per person for both men and women. Between 1970 and 2000 increased longevity added about$3.2 trillion per year to national wealth, an uncounted value equal to about half of average annual GDP over the period. Reduced mortality from heart disease alone has increased the value of life by about $1.5 trillion per year since 1970. The potential gains from future innovations in health care are also extremely large. Even a modest 1 percent reduction in cancer mortality would be worth nearly$500 billion.

Fertility decline, baby boom and economic growth

We present new data documenting the secular decline in fertility in the states of the United States, the dramatic convergence in fertility, child schooling, parental schooling, survival probabilities. In addition we document the disparate nature of the Baby Boom in the United States. There were two different regimes, a large Baby Boom and a Small Baby Boom. The large Baby Boom regions also had the smallest increase in child schooling, whereas the small Baby Boom regions had the largest increase in child schooling. We present suggestive evidence that falling mortality risk is strongly positively correlated with falling fertility, rising education levels of parents is strongly negatively related to fetility, and that population density is negatively related to fertility. Finally we show the robust negative correlation of mortality risk on child schooling attainment, and positve correlation of population density and child schooling attainment.mortality; density; fertility decline; baby boom; economic growth

The Allocation of Talent: Implications for Growth

A country's most talented people typically organize production by others, so they can spread their ability advantage over a larger scale. When they start firms, they innovate and foster growth, but when they become rent seekers, they only redistribute wealth and reduce growth. Occupational choice depends on returns to ability and to scale in each sector, on market size, and on compensation contracts. In most countries, rent seeking rewards talent more than entrepreneurship does, leading to stagnation. Our evidence shows that countries with a higher proportion of engineering college majors grow faster; whereas countries with a higher proportion of law concentrators grow slower.