Andrea Asoni, Andrea Gilli, Mauro Gilli, Tino Sanandaji, 19 September 2021

There is a common perception that the US military predominantly recruits individuals from the most disadvantaged socioeconomic backgrounds with limited other career options. This column argues that this is no longer the case. Skill-biased technological change has led the US military to recruit more higher-skilled personnel since the 1990s, and while in 1979 the probability of joining the military was clearly higher for those with lower-than-average family income, for the 1997 cohort the probability was much more evenly distributed.

Yoshio Higuchi, Naomi Kodama, Izumi Yokoyama, 11 November 2016

Studies have confirmed an increase in earnings inequality in Japan, but do not agree on how or when it increased, or which groups were most affected. This column decomposes changes in earnings data to show a recent decrease in the returns to general human capital of almost all Japanese workers, at the same time as an increase in the returns to firm-specific human capital among male workers with high wage rates. Gender-based wage inequality has persisted.

Daron Acemoğlu, Gino Gancia, Fabrizio Zilibotti, 30 September 2014

Offshoring of production can have a deep impact on the wages and welfare of workers with different abilities through its effect on technological progress. This column argues that, when labour is sufficiently cheap abroad, firms have incentives to offshore low-skill tasks and invest in skill-biased technologies at home. Over time, however, offshoring raises foreign wages. This increases demand for all firms and makes innovations complementing low-skill workers more profitable. As a result, offshoring can eventually lead to higher wages for everybody and less inequality.

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