Low skill wages and mismeasured inflation

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Abstract

The current literature presents evidence that the real wage of male workers at the 10th percentile of the wage distribution has fallen since 1970. Yet, contributions within this literature deflate nominal wages using a mismeasured deflator. Another strand of literature documents that the mismeasurement of the deflator is sizable, with recent estimates exceeding0.6 percentage points per year. In this paper, I adjust the deflator and reestimate the implied evolution of male low skill wages. This simple exercise implies that male low skill wages were about 15 log-points higher in 2013 than in 1970.
Original languageEnglish
Number of pages7
JournalApplied Economics Letters
Early online date17 Sep 2018
DOIs
Publication statusEarly online date - 17 Sep 2018
Externally publishedYes

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