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Between- and within-group wage inequalities, and the advent of new technology

Abstract

We present a simple model that explains two features of the dynamics of wage inequalities: between-group and within-group. Individuals are assumed to be heterogeneous in their innate abilities. With the advent of a new technology, each individual decides whether or not to acquire the skill for the new high-tech sector. The heterogeneity explains not only the between-group wage inequality but also the within-group wage inequality, which are observed in advanced countries such as the US and UK.

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Correspondence to Kazunobu Muro.

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Miyake, A., Muro, K., Nakamura, T. et al. Between- and within-group wage inequalities, and the advent of new technology. J Econ Inequal 7, 387 (2009). https://doi.org/10.1007/s10888-008-9091-2

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Keywords

  • Between-group inequality
  • Within-group inequality
  • Occupational choice

JEL Classification

  • D31
  • E20
  • J31