Social Class and Earnings Inequality

Abstract

The authors examine whether growth in earnings inequality has played out in ways that are class strengthening or class weakening. Using the Current Population Survey, they show that the absolute amount of inequality is increasing (a) between big classes, (b) between the occupations constituting big classes, and (c) within occupations. In relative terms, the share of total inequality occurring within occupations has declined, whereas the share of total inequality occurring between classes and between the occupations constituting big classes has tended to increase, most clearly for men. Although the majority of earnings inequality is still generated within occupations, especially rapid growth of the between-class and between-occupation components implies that the well-known takeoff in inequality has generated a “lumpier” earnings distribution with relatively stronger class and occupational distinctions.