BPEA | 1991: Microeconomics

Wage Dispersion between and within U.S. Manufacturing Plants, 1963-86

John Haltiwanger and
John Haltiwanger Professor of Economics - University of Maryland
Steve J. Davis
Steve J. Davis University of Chicago

Microeconomics 1991

THIS PAPER EXPLOITS a rich and largely untapped source of information on the wages and other characteristics of individual manufacturing plants to cast new light on recent changes in the U.S. wage structure. Our primary data source, the Longitudinal Research Datafile (LRD), contains observations on more than 300,000 manufacturing plants during census years (1963, 1967, 1972, 1977, 1982) and 50,000-70,000 plants during intercensus years since 1972. We use the information in the LRD to investigate changes in the plant-wage structure over the past three decades. We also combine plant-level wage observations in the LRD with wage observations on individual workers in the Current Population Survey (CPS) to estimate the between-plant and within-plant components of overall wage dispersion.