Keywords: Wage inequality, wage compression, pay equity
Abstract: In recent years, numerous observers have argued that global competition,
increased reliance on contingent workers, and the breakdown of implicit
have made compensation practices in the United States more flexible; in
employers have become more concerned with how an employee's pay compares to
that in other firms and less concerned with considerations of equity or
within the firm. This paper uses establishment-level data from the Bureau
Statistics' Employment Cost Index program to examine this claim by asking
whether the variances of compensation within and between establishments
moved in a more "flexible" direction over the 1980s and 1990s. We find
consistent with increased flexibility.
Full paper (568 KB PDF)
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Last update: May 31, 2000