Chapter

International Differences in Male Wage Inequality: Institutions versus Market Forces

Lawrence M. Kahn

in Gender, Inequality, and Wages

Published in print September 2012 | ISBN: 9780199665853
Published online January 2013 | e-ISBN: 9780191745805 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199665853.003.0008

Series: IZA Prize in Labor Economics

International Differences in Male Wage Inequality: Institutions versus Market Forces

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This chapter studies the considerably higher level of wage inequality in the US than in nine other OECD countries. It appears that the greater overall US wage dispersion primarily reflects substantially more compression at the bottom of the wage distribution in the other countries. While differences in the distribution of measured characteristics help to explain some aspects of the international differences, higher U.S. prices (i.e., rewards to skills and rents) are an important factor. Labour market institutions, chiefly the relatively decentralized wage-setting mechanisms in the US, provide the most persuasive explanation for these patterns.

Keywords: wage inequality; wage differentials; labour market institutions; wage-setting mechanisms

Chapter.  15049 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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