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Evidence on Wage Inequality, Worker Education and Technology

This paper looks at a sample of 230 U.S. industries between 1983 and 2002 to see how a worker's education level and on-the-job use of “skill-based” technology (i.e., computers) relates to wages. The author uncovers two conclusions: Rising U.S. wage inequality has been caused predominantly by increasing wage dispersion within industries rather than between industries. And within-industry inequality is strongly tied to both the frequency of computer usage among workers and the fraction of workers with a college degree.