Hostname: page-component-cd9895bd7-fscjk Total loading time: 0 Render date: 2024-12-27T11:34:14.659Z Has data issue: false hasContentIssue false
  • English
  • Français

ENDOGENOUS POLITICAL INSTITUTIONS, WAGE INEQUALITY, AND ECONOMIC GROWTH

Published online by Cambridge University Press:  21 December 2016

Christos Pargianas
Christos Pargianas*
Affiliation:
University of Scranton
*
Address correspondence to: Christos Pargianas, University of Scranton, 320 Madison Avenue, Scranton, PA 18510, USA; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

The paper suggests that the political changes brought about by the increase in the proportion of college graduates in the U.S. labor force in the 1970s may have contributed to the decline in the college premium during the 1970s and its increase during the 1980s and 1990s. The study argues that the proportion of skilled workers in the labor force affected their relative importance in the political process. Thus, the increase in the proportion of skilled workers during the 1970s reduced the skill premium in the short run, but induced a change in policies that favored skilled workers and increased the skill premium in the long run.

Keywords

Economic InstitutionsInequalityEducationEconomic Growth
Type
Articles
Information
Macroeconomic Dynamics , Volume 21 , Issue 1 , January 2017 , pp. 183 - 213
Copyright
Copyright © Cambridge University Press 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Acemoglu, Daron (1998) Why do new technologies complement skills? Directed technical change and wage inequality. Quarterly Journal of Economics 113, 1055–1090.CrossRefGoogle Scholar
Acemoglu, Daron (2003) Patterns of skill premia. Review of Economic Studies 70, 199–230.Google Scholar
Acemoglu, Daron (2006) A simple model of inefficient institutions. Scandinavian Journal of Economics 108, 515–546.Google Scholar
Acemoglu, Daron (2008) Introduction to Modern Economic Growth. Princeton, NJ: Princeton University Press.Google Scholar
Acemoglu, Daron and Autor, David (2011) Skills, tasks and technologies: Implications for employment and earnings. In Card, David and Ashenfelter, Orley (eds.), Handbook of Labor Economics, pp. 1043–1171. New York: Elsevier.Google Scholar
Acemoglu, Daron and Zilibotti, Fabrizio (2001) Productivity differences. Quarterly Journal of Economics 116, 563–606.Google Scholar
Aghion, Philippe and Howitt, Peter (1992) A model of growth through creative destruction. Econometrica 60, 323–351.Google Scholar
Aghion, Philippe and Howitt, Peter (2009) The Economics of Growth. Cambridge, MA: MIT Press.Google Scholar
Alesina, Alberto and Perotti, Roberto (1996) Income distribution, political instability, and investment. European Economic Review 40, 1203–1225.Google Scholar
Alesina, Alberto and Rodrik, Dani (1994) Distributive politics and economic growth. Quarterly Journal of Economics 109, 465–490.Google Scholar
Ansolabehere, Stephen, de Figueiredo, John M., and Snyder, James M. Jr., (2003) Why is there so little money in U.S. politics? Journal of Economic Perspectives 17, 105–130.Google Scholar
Ansolabehere, Stephen and Iyengar, Shanto (1996) Going Negative: How Political Advertisements Shrink and Polarize the Electorate. New York: Free Press.Google Scholar
Autor, David, Katz, Lawrence F., and Krueger, Alan B. (1998) Computing inequality: Have computers changed the labor market? Quarterly Journal of Economics 113, 1169–1213.Google Scholar
Azariadis, Costas (1996) The economics of poverty traps. Journal of Economic Growth 1, 449–486.CrossRefGoogle Scholar
Azariadis, Costas and Drazen, Allan (1990) Threshold externalities in economic development. Quarterly Journal of Economics 105, 501–526.Google Scholar
Baron, David P. (1994) Electoral competition with informed and uninformed voters. American Political Science Review 88, 33–47.Google Scholar
Barro, Robert and Lee, Jong Wha (2013) A New Data Set of Educational Attainment in the World, 1950–2010. NBER working paper 15902.Google Scholar
Bartels, Larry M. (2006) What's the matter with what's the matter with Kansas? Quarterly Journal of Political Science, 201–226.Google Scholar
Basu, Susanto and Weil, David N. (1998) Appropriate technology and growth. Quarterly Journal of Economics 113, 1025–1054.Google Scholar
Becker, Gary S. (1964) Human Capital. New York: Columbia University Press.Google Scholar
Benabou, Roland J.M. (2005) Inequality, technology, and the social contract. In Aghion, Philippe and Durlauf, Steven (eds.), Handbook of Economic Growth, pp. 1595–1638. New York: Elsevier.Google Scholar
Benhabib, Jess and Spiegel, Mark M. (1994) The role of human capital in economic development: Evidence from aggregate cross-country data. Journal of Monetary Economics 34, 143–173.Google Scholar
Benhabib, Jess and Spiegel, Mark M. (2005). Human capital and technology diffusion. In Aghion, Philippe and Durlauf, Steven (eds.), Handbook of Economic Growth, pp. 935–966. New York: Elsevier.Google Scholar
Bourguignon, Francois and Verdier, Thierry (2000) Oligarchy, democracy, inequality and growth. Journal of Development Economics 62, 285–313.Google Scholar
Breton, Theodore R. (2013) Were Mankiw, Romer, and Weil right? A reconciliation of the micro and macro effects of schooling on income. Macroeconomic Dynamics 17, 1023–1054.Google Scholar
Card, David E. and Krueger, Alan B. (1995) Myth and Measurement: The New Economics of the Minimum Wage. Princeton, NJ: Princeton University Press.Google Scholar
Card, David E. and Lemieux, Thomas (2001) Can falling supply explain the rising return to college for younger men? A cohort-based analysis. Quarterly Journal of Economics 116, 705–746.Google Scholar
Dee, Thomas S. (2004) Are there civic returns to education? Journal of Public Economics 88, 1697–1720.CrossRefGoogle Scholar
Delli Carpini, Michael X. and Keefer, Scott (1996) What Americans Know about Politics and Why It Matters. New Haven, CT: Yale University Press.Google Scholar
DiNardo, John E., Fortin, Nicole M., and Lemieux, Thomas (1996) Labor market institutions and the distribution of wages, 1973–1992: A semiparametric approach. Econometrica 65, 1001–1044.Google Scholar
Dinopoulos, Elias and Segerstrom, Paul (1999) A Schumpeterian model of protection and relative wages. American Economic Review 89, 450–472.Google Scholar
Downs, Anthony (1957) An Economic Theory of Democracy. New York: Harper.Google Scholar
Feddersen, Timothi J., Sened, Itai, and Wright, Stephen G. (1990) Rational voting and candidate entry under plurality rule. American Journal of Political Science 34, 1005–1016.Google Scholar
Feldstein, Martin S. (1994) American Economic Policy in the 1980s. Chicago: National Bureau of Economic Research, University of Chicago Press.Google Scholar
Fortin, Nicole M. and Lemieux, Thomas (1997) Institutional changes and rising wage inequality: Is there a linkage? Journal of Economic Perspectives 11, 75–96.CrossRefGoogle Scholar
Frank, Thomas (2004) What's the Matter with Kansas. New York: Picador.Google Scholar
Franz, Michael M. and Ridout, Travis N. (2007) Does political advertising persuade? Political Behavior 29, 465–491.Google Scholar
Freedman, Paul, Franz, Michael M., and Goldstein, Kenneth (2004) Campaign advertising and democratic citizenship. American Journal of Political Science 48, 723–741.Google Scholar
Freeman, Richard and Katz, Lawrence F. (1995) Introduction and summary. In Freeman, Richard and Katz, Lawrence (eds.), Differences and Changes in Wage Structures, pp. 1–24. Chicago: University of Chicago Press.Google Scholar
Galor, Oded (2011) Unified Growth Theory. Princeton, NJ Princeton University Press.Google Scholar
Galor, Oded and Moav, Omer (2000) Ability-biased technological transition, wage inequality, and economic growth. Quarterly Journal of Economics 115, 469–497.Google Scholar
Galor, Oded and Moav, Omer (2004) From physical to human capital accumulation: Inequality and the process of development. Review of Economic Studies 71, 1001–1026.Google Scholar
Galor, Oded and Moav, Omer (2006) Das human-kapital: A theory of the demise of the class structure. Review of Economic Studies 73, 85–117.Google Scholar
Galor, Oded, Moav, Omer, and Vollrath, Dietrich (2009) Inequality in landownership, the emergence of human-capital promoting institutions and the great divergence. Review of Economic Studies 76, 143–179.Google Scholar
Galor, Oded and Tsiddon, Daniel (1997) Technological progress, mobility, and growth. American Economic Review 87, 363–382.Google Scholar
Galor, Oded and Weil, David N. (1999) From Malthusian stagnation to modern growth. American Economic Review 89, 150–154.Google Scholar
Galor, Oded and Weil, David N. (2000) Population, technology, and growth: From the Malthusian regime to the demographic transition. American Economic Review 110, 806–828.Google Scholar
Galor, Oded and Zeira, Joseph (1993) Income distribution and macroeconomics. Review of Economic Studies 60, 35–52.Google Scholar
Gerring, John (1998) Party Ideologies in America, 1828–1996. New York: Cambridge University Press.Google Scholar
Gersbach, Hans and Muhe, Felix (2011) Vote-buying and growth. Macroeconomic Dynamics 15, 656–80.CrossRefGoogle Scholar
Glaeser, Edward L., Ponzetto, Giacomo A. M., and Shleifer, Andrei (2007) Why does democracy need education? Journal of Economic Growth 12, 77–99.Google Scholar
Goldin, Claudia and Katz, Lawrence (2008) The Race between Education and Technology. Cambridge, MA: Harvard University Press.Google Scholar
Gould, Eric D., Moav, Omer, and Weinberg, Bruce A. (2001) Precautionary demand for education, inequality, and technological progress. Journal of Economic Growth 6, 285–315.Google Scholar
Grossman, Gene M. and Helpman, Elhanan (1996) Electoral competition and special interest politics. Review of Economic Studies 63, 265–286.Google Scholar
Grossman, Gene M. and Helpman, Elhanan (2001) Special Interest Politics. Cambridge, MA: MIT Press.Google Scholar
Growiec, Jakub (2010) Human capital, aggregation, and growth. Macroeconomic Dynamics 14, 189–211.Google Scholar
Hacker, Jacob S. and Pierson, Paul (2011) Winner Take All Politics. New York: Simon and Schuster.Google Scholar
Hendel, Igal, Shapiro, Joel, and Willen, Paul (2005) Educational opportunity and income inequality. Journal of Public Economics 89, 841–870.Google Scholar
Howitt, Peter and Mayer-Foulkes, David A. (2005) R & D, implementation, and stagnation: A Schumpeterian theory of convergence clubs. Journal of Money, Credit and Banking 37, 147–177.CrossRefGoogle Scholar
Joslyn, Mark R. (2003) The determinants and consequences of recall error about Gulf War preferences. American Journal of Political Science 47, 440–452.Google Scholar
Juhn, Chinhui, Murphy, Kevin M., and Pierce, Brooks (1993) Wage inequality and the rise in returns to skill. Journal of Political Economy 101, 410–442.CrossRefGoogle Scholar
Kaid, Lynda L. and Tedesco, John C. (1999) Tracking voter reactions to television advertising. In Kaid, Lynda L. and Bystrom, Dianne G. (eds.), The Electronic Election: Perspectives on the 1996 Campaign Communication, pp. 233–245. Mahwah, NJ: Erlbaum.Google Scholar
Katz, Lawrence and Murphy, Kevin (1992) Changes in relative wages, 1963–1987: Supply and demand factors. Quarterly Journal of Economics 107, 35–78.Google Scholar
Kiley, Michael T. (1999) The supply of skilled labour and skill-biased technological progress. Economic Journal 109, 708–724.CrossRefGoogle Scholar
Lee, David S. (1999) Wage inequality in the United States during the 1980s: Rising dispersion or falling minimum wage? Quarterly Journal of Economics 114, 977–1023.Google Scholar
Lemieux, Thomas (2006) Increasing residual wage inequality: Composition effects, noisy data, or rising demand for skill? American Economic Review 96, 461–498.Google Scholar
Lucas, Robert E. Jr., (1988) On the mechanics of economic development. Journal of Monetary Economics 22, 3–42.Google Scholar
Mankiw, N. Gregory, David Romer, and Weil, David N. (1992) A contribution to the empirics of economic growth. Quarterly Journal of Economics 107, 407–437.Google Scholar
Matsuyama, Kiminori (2007) Beyond icebergs: Towards a theory of biased globalization. Review of Economic Studies 74, 237–253.Google Scholar
McCarthy, Nolan, Poole, Keith T., and Rosenthal, Howard (2006) Polarized America: The Dance of Ideology and Unequal Riches. Cambridge, MA: MIT Press.Google Scholar
Milligan, Kevin, Moretti, Enrico, and Oreopoulos, Philip (2004) Does education improve citizenship? Evidence for the United States and the United Kingdom. Journal of Public Economics 88, 1667–1695.Google Scholar
Mincer, Jacob (1974) Schooling, Experience, and Earnings. New York: Columbia University Press.Google Scholar
Mishel, Lawrence, Bernstein, Jared, and Schmitt, John (1996) The State of Working America, 1996–1997. New York: Armonk, M. E. Sharpe, Economic Policy Institute.Google Scholar
Murphy, Kevin M., Shleifer, Andrei, and Vishny, Robert W. (1993) Why is rent seeking so costly to growth? American Economic Review Papers and Proceedings 83, 409–414.Google Scholar
Nelson, Richard R. and Phelps, Edmund S. (1966) Investment in humans, technological diffusion, and economic growth. American Economic Review 61, 69–75.Google Scholar
Palivos, Theodore and Karagiannis, Giannis (2010) The elasticity of substitution as an engine of growth. Macroeconomic Dynamics 14, 617–628.Google Scholar
Patterson, Thomas E. and McClure, Robert D. (1976) The Unseeing Eye: The Myth of Television Power in National Elections. New York: Putnam Press.Google Scholar
Persson, Torsten and Tabellini, Guido (1994) Is inequality harmful for growth? American Economic Review 84, 600–621.Google Scholar
Persson, Torsten and Tabellini, Guido (2002) Political Economics: Explaining Economic Policy. Cambridge, MA: MIT Press.Google Scholar
Prat, Andrea (2006) Rational voters and political advertising. In Weingast, Barry R. and Wittman, Donald A. (eds.), The Oxford Handbook of Political Economy, pp. 50–63, New York: Oxford University Press.Google Scholar
Stengos, Thanasis and Yazgan, M. Ege (2014) Persistence in convergence. Macroeconomic Dynamics 18, 753–782.CrossRefGoogle Scholar
Valentino, Nicholas A., Hutchings, Vincent L., and Williams, Dmitri (2004) The impact of political advertising on knowledge, Internet information seeking, and candidate preference. Journal of Communication 54, 337–354.Google Scholar
Wegenast, Tim (2010) Uninformed voters for sale: Electoral competition, information and interest groups in the US. Kyklos 63, 271–300.Google Scholar
Weil, David N. (2013) Economic Growth. Upper Saddle River, NJ: Pearson.Google Scholar