A comparison of changes in the structure of wages in four OECD countries

Abstract

This paper compares changes in the structure if wages in France, Great Britain, Japan and the United States over the last twenty years. Wage differentials by education and occupation (skill differentials) narrowed substantially in all four countries in the 1970s. Overall wage inequality and skill differentials expanded dramatically in Great Britain and the United States and moderately in Japan during the 1980s. In contrast, wage inequality did not increase by much in France through the mid-1980s. Industrial and occupational shifts favored more educated workers in all four countries throughout the last twenty years. Reductions in the rate of the growth of the relative supply of college-educated workers in the face of persistent increases in educational wage differentials in the United States, Great Britain, and Japan in the 1980s. Sharp increases in the national minimum wage (the SMC) and the ability of French unions to extend contracts even in the face of declining membership helped prevent wage differentials from expanding in France through the mid-1980s.