A dynamic equilibrium model of the US wage structure, 1968-1996
- The University of Chicago
- Publication Type:
- Journal Article
- Journal of Labor Economics, 2013, 31 (1), pp. 1 - 49
- Issue Date:
We develop an equilibrium model of the US labor market, fit to Panel Study of Income Dynamics data from 196896. Our main innovation is a finer differentiation of types of labor than in prior work (i.e., by occupation, education, gender, and age). This lets us fit wage and employment patterns better than simpler models.We obtain a good fit to wages and occupational choices over the 29-year period while also explaining college attendance rates. We use the model to assess factors driving changes in the wage structure. Occupational demand shifts and shifts in demand for college labor and female labor within occupations are key factors.
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