Monday, April 21, 2008

Rising Inequality Explained By....Educational Slowdown?

Mankiw has an AEI short publication out called The Wealth Trajectory: Rewards for the Few. It's interesting reading. He summarizes some recent results that have found quantitative support for the belief that economic inequality has risen (but interestingly, also show that it was also steadily rising in the 80s and 90s) -- not too many would find this all that controversial.

The interesting part is the thesis of Claudia Goldin and Lawrence Katz: that basically people have slowed down the rate of increase of years of schooling, leading to more scarcity of the most qualified people. They assert that the latest crop of highest end jobs are -- like most 'new' jobs in recent decades -- knoweldge worker jobs, and that people have not ramped their education as fast as the switch-to-knowledge move in jobs has occurred.

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