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Title: A Dynamic Structural Equation Approach to Modeling Wage Dynamics and Cumulative Advantage across the Lifespan
Resulting in 1 citation.
1. Hasl, Andrea
Voelkle, Manuel
Kretschmann, Julia
Richter, Dirk
Brunner, Martin
A Dynamic Structural Equation Approach to Modeling Wage Dynamics and Cumulative Advantage across the Lifespan
Multivariate Behavioral Research published online (7 February 2022): DOI: 10.1080/00273171.2022.2029339.
Also: https://www.tandfonline.com/doi/full/10.1080/00273171.2022.2029339
Cohort(s): NLSY79
Publisher: Taylor & Francis
Keyword(s): Educational Attainment; Intelligence; Modeling, Structural Equation; Research Methodology; Wage Dynamics; Wage Growth

Wages and wage dynamics directly affect individuals' and families' daily lives. In this article, we show how major theoretical branches of research on wages and inequality--that is, cumulative advantage (CA), human capital theory, and the lifespan perspective--can be integrated into a coherent statistical framework and analyzed with multilevel dynamic structural equation modeling (DSEM). This opens up a new way to empirically investigate the mechanisms that drive growing inequality over time. We demonstrate the new approach by making use of longitudinal, representative U.S. data (NLSY-79). Analyses revealed fundamental between-person differences in both initial wages and autoregressive wage growth rates across the lifespan. Only 0.5% of the sample experienced a "strict" CA and unbounded wage growth, whereas most individuals revealed logarithmic wage growth over time. Adolescent intelligence and adult educational levels explained substantial heterogeneity in both parameters. We discuss how DSEM may help researchers study CA processes and related developmental dynamics, and we highlight the extensions and limitations of the DSEM framework.
Bibliography Citation
Hasl, Andrea, Manuel Voelkle, Julia Kretschmann, Dirk Richter and Martin Brunner. "A Dynamic Structural Equation Approach to Modeling Wage Dynamics and Cumulative Advantage across the Lifespan." Multivariate Behavioral Research published online (7 February 2022): DOI: 10.1080/00273171.2022.2029339.