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December 1997

Reassessing trends in U.S. earnings inequality

Robert I. Lerman

Earnings inequality trends are sensitive to the earnings concept and sample of workers surveyed. The concept of wage distribution across all hours worked yields virtually no change in inequality between the mid-1980s and mid-1990s for measures not influenced by top coding. This article argues that some commonly used measures may be appropriate for normative questions, but they are inappropriate for assessing how market and institutional forces combine to alter the overall distribution of quantities of labor input purchased at each price (wage).

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