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  5. Rising Top, Falling Bottom: Industries and Rising Wage Inequality

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Rising Top, Falling Bottom: Industries and Rising Wage Inequality

  • John Haltiwanger
  • Henry R. Hyatt
  • James R. Spletzer
American Economic Review (Forthcoming)

Abstract

Most of the rise in overall earnings inequality from 1996 to 2018 is accounted for by rising between-industry dispersion. The contribution of industries is right-skewed with the top ten percent of 4-digit NAICS industries dominating. The top ten percent are clustered in high-paying high-tech and low-paying retail sectors. In the top industries, high-wage workers are increasingly sorted to high-wage industries with rising industry premia. In the bottom industries, low-wage workers are increasingly sorted into low-wage industries, with rising employment and falling industry wage premia.

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