Extract from “Skills, Education, and the

Rise of Earnings Inequality among the

‘Other 99 Percent’ ”

By David H. Autor. Published in Science (May, 2014)

Volume 344, Issue 6186, pp. 843–851.

James J. HeckmanUniversity of Chicago

AEA Continuing Education ProgramASSA Course: Microeconomics of Life Course Inequality

San Francisco, CA, January 5-7, 2016

Autor Autor (2014)

Figure 1: College/high school median annual earnings gap, 1979-2012(In constant 2012 dollars)

$17,411

$23,915

$30,241

$37,225$34,053 $34,969

$12,887$15,543

$21,107$23,759

$26,003$23,280

$30,298

$39,459

$51,348

$60,984 $60,056$58,249

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

Male Gap Female Gap Household Gap

Autor Autor (2014)

Figure 2: Cross-national differences in wage returns to skills, 2011-2013(Percentage increase for a one standard deviation increase in skill)

05

1015

2025

30P

erce

ntag

e In

crea

se

Sw

eden

Cze

ch R

.

Nor

way

Italy

Den

mar

k

Cyp

rus

Fin

land

Bel

gium

Fra

nce

Est

onia

Slo

vak

R.

Aus

tria

Net

herla

nds

Japa

n

Pol

and

Can

ada

Kor

ea

U.K

.

Spa

in

Ger

man

y

Irel

and

U.S

.

Earnings Gain 95% Confidence Interval

Autor Autor (2014)

Figure 3: The supply of college graduates and the U.S. college/highschool premium, 1963-2012

(A) College share of hours worked (%), 1963-2012: All working-age adults

Autor Autor (2014)

Figure 3: The supply of college graduates and the U.S. college/highschool premium, 1963-2012 (cont.)

(B) College versus high school wage gap (%)

Autor Autor (2014)

Figure 4: Present discounted value of college relative to high schooldegree net of tuition, 1965-2008(College/high school difference, 2009 dollars)

$213K

$368K

$261K

$385K

$439K

$582K $590K

$129K

$198K

$138K

$225K

$284K

$387K$370K

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Col

lege

/Hig

h S

choo

l Diff

eren

ce, 2

009

Dol

lars

1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Men Women

Autor Autor (2014)

Figure 5: Earnings inequality and economic mobility: cross-nationalrelationships

(A) Generational earnings elasticity

(higher values imply lower mobility)

Denmark

NorwayFinland

CanadaAustralia

SwedenNew Zealand

GermanyJapan

France

United States

United KingdomItaly

.1.2

.3.4

.5G

ener

atio

nal E

arni

ngs

Ela

stic

ity (

Less

Mob

ility

−>

)

20 25 30 35Income Inequality (More Inequality −>)

Autor Autor (2014)

Figure 5: Earnings inequality and economic mobility: cross-nationalrelationships (cont.)

(B) Generational earnings elasticity

(higher values imply lower mobility)

DenmarkNorway

Finland

CanadaAustralia

Sweden

New Zealand GermanyJapan

SpainFrance

United StatesUnited KingdomItaly

.1.2

.3.4

.5G

ener

atio

nal E

arni

ngs

Ela

stic

ity (

Less

Mob

ility

−>

)

100 120 140 160 180College Earnings Premium (Men 25 to 34)

Autor Autor (2014)

Figure 6: Changes in real wage levels of full-time U.S. workers by sex andeducation, 1963-2012

(A) Real weekly earnings relative to 1963 (men)

Autor Autor (2014)

Figure 6: Changes in real wage levels of full-time U.S. workers by sex andeducation, 1963-2012 (cont.)

(B) Real weekly earnings relative to 1963 (women)

Autor Autor (2014)