The paper examines three issues in the identification of a possible “middle class” using data from LIS. It considers first definitions based purely on income, examining the rationale for different approaches and illustrating the implications for changes over time. It argues that any interpretation in terms of “class” requires the examination of dimensions other than income. The second part of t...

To examine the impact of globalization on managerial compensation, we consider a matching model where a number of firms compete both in the product market and in the managerial market. We show that globalization, i.e. the simultaneous integration of product markets and managerial pools, leads to an increase in the heterogeneity of managerial salaries. Typically, while the most able managers obt...

Wage Gaps Large and Small The law of one wage does not strictly hold, nor should it be expected to hold, in contemporary labor markets. The law of one wage, however, provides a surprisingly good first approximation of the structure of U.S. wages. This generalization is drawn from research on a diverse set of topics: the Mincerian wage equation and earnings imputation, union wage differentials, ...

We propose an estimator of conditional wage distributions that is based on a piecewise-linear specification of the conditional hazard function. Under a minimal set of assupmptions, the estimator is flexible enough to capture almost any underlying relationship. It is not affected by the curse of dimensionality and allows to derive conditional Lorenz curves and Gini indices. The methodology is ap...

The recent changes in the U.S. wage structure are often linked to the new wave of capital-embodied information technologies. The existing literature has emphasized either the accelerated pace or the skill-bias of embodied technical progress as the driving force behind the rise in wage inequality. A key, neglected, aspect is the \general purpose" nature of the new information technologies. This ...

Absolute Risk Aversion and the Returns to Education Individual absolute risk aversion is measured for a sample of 1373 male household heads, using the 1995 wave of the Survey on the Income and Wealth of Italian households. This measure, conditional on financial and real wealth and household income, is used as an instrument for attained education in a standard log earnings equation. I find that,...

Using Current Population Survey data, we find that the gap between the wages of black and white males declined during the 1990s at a rate of about .60 percentage point per year. Wage convergence was most rapid among workers with less than 10 years of potential experience, with declines in the gap averaging 1.40 percentage points per year. Using standard decomposition methods, we find that great...

In our general equilibrium model, the variety of specialized service links affects international production fragmentation in manufacturing. Decreases in cost of education or fixed cost of service links raise the relative supply of skilled workers, increase service specialization, and decrease the price of aggregate services. Consequently, the market for serviceand skill-intensive component manu...

Using German linked employer-employee data, this paper investigates the impact of on-the-job training on wages. The applied estimation technique was fi rst introduced by Leuven and Oosterbeek (2008). The idea is to compare wages of employees who intended to participate in training but did not do so because of a random event with wages of training participants. The estimated wage returns are sta...

Analogous to the well-documented firm size-wage differential there also exists a differential in layoff risk according to firm size. Using Austrian data I discuss several reasons for this puzzle, including on-the-job training and workers' heterogeneity. If less stable (and also less able) workers select themselves into small, unstable and low paying firms, predicted layoff risk of workers can b...