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Inequality in Male Earnings and Earnings Capacity, 1973-1988: The Effects of Changes in "Opportunityn and "ChoiceH

The authors confirm that earnings inequality among males has increased rapidly since the early 1970s. They demonstrate that this increase has had less to do with labor market opportunities than previous researchers have claimed, and more to do with the choices of individuals regarding jobs and wage rates than hitherto acknowledged. Along the way, they explain the concept of "earnings capacity" and present estimates of earnings capacity inequality and of inequality in the utilization of earnings capacity. They use these measures to illustrate the important role that individual choices have played in rising earnings inequality. Data are from March 1974 and 1989 Current Population Surveys. Inequality in Male Earnings and Earnings Capacity, 1973-1988: The Effects of Changes in "Opportunity" and "Choice"