BPEA | Fall 2007

Long-Run Changes in the Wage Structure: Narrowing, Widening, Polarizing

Claudia Goldin and
Claudia Goldin
Claudia Goldin Henry Lee Professor of Economics - Harvard University
Lawrence F. Katz

Fall 2007

FROM THE CLOSE OF WORLD WAR II TO 1970—the year the Brookings
Papers on Economic Activity commenced publication—America enjoyed
widespread prosperity. Not only did the national economy grow rapidly,
driven by robust productivity growth, but all parts of the income distribution
expanded at fairly similar rates. America was “growing together.”
But in the mid-1970s economic growth slowed. By the early 1980s the
wage structure had begun a period of widening that has lasted until the
present day. Even though productivity growth surged again starting in
the mid-1990s, the benefits of economic growth have been concentrated at
the top end of the distribution.1 America has been “growing apart.”