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Title: Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components
Resulting in 1 citation.
1. Cunha, Flavio
Heckman, James J.
Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components
Journal of Labor Economics 34,S2 (April 2016): S31–S65.
Also: http://www.journals.uchicago.edu/doi/abs/10.1086/684121
Cohort(s): NLSY79, Young Men
Publisher: University of Chicago Press
Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); Earnings; Educational Attainment; Skilled Workers; Test Scores/Test theory/IRT; Wage Differentials

A substantial empirical literature documents the rise in wage inequality in the American economy. It is silent on whether the increase in inequality is due to components of earnings that are predictable by agents or whether it is due to greater uncertainty facing them. These two sources of variability have different consequences for both aggregate and individual welfare. Using data on two cohorts of American males, we find that a large component of the rise in inequality for less skilled workers is due to uncertainty. For skilled workers, the rise is less pronounced.
Bibliography Citation
Cunha, Flavio and James J. Heckman. "Decomposing Trends in Inequality in Earnings into Forecastable and Uncertain Components." Journal of Labor Economics 34,S2 (April 2016): S31–S65. A.