Wage Inequality: A Comparative Perspective

Abstract

Wage inequality has been increasing in most industrialised countries over the last three decades. There are, nonetheless, major differences across countries in terms of the timing and magnitude of the growth in inequality. A large number of explanations have been suggested for these observed changes, including technological progress and the computer revolution, labour market institutions and social norms, and changes in the relative supply of highly educated workers. This paper assesses the validity of these explanations in the light of large differences in inequality growth across countries, and the stunning growth in the concentration of income at the top end of the distribution.