This article was originally presented as the Homer Jones Memorial Lecture, organized by the Federal Reserve Bank of St. Louis, St. Louis, Missouri, April 13, 2011.
The authors use a multitude of data sources to provide a comprehensive, multidimensional decomposition of wages across both time and educational status. Their results confirm the importance of investments in and use of technology, which has been the focus of most of the previous literature. The authors also show that demand and supply factors played very different roles in the growing wage gaps of the 1980s and 1990s.
This article contains synopses of the papers presented at the 35th Annual Economic Policy Conference of the Federal Reserve Bank of St. Louis held October 21-22, 2010. The conference theme was "Frictions in Financial and Labor Markets." Leading participants in this field presented their research and commentary.
An earlier version of this article was delivered as a speech to the Money Marketeers of New York University, New York, New York, May 18, 2011.