The Differing Wage Levels And Income Inequality Essay

The differing wage levels and income inequality in the US is a topic that has been studied extensively. However the factors that influence the wage rate and the relative importance of each of the variables remains unclear. This paper will conduct a study using regression analysis of cross sectional data to examine various different factors that affect wages considering education, marital and family status, gender, a number of control variables and how they are all connected. Review of Literature Education It is commonly accepted in theory and in empirical results, that in general, a higher level of education will yield a higher wage (Acemoglu and Autor 2011). In recent years there are studies to suggest that the importance of education has increased (Atkinson 2008). Goldin and Katz (2007) found that the economic returns of completing high school today appear substantial and the economic benefits to college and post-college schooling are at historically high levels. Additionally, the wages of US individuals that have a postgraduate degree have increased significantly since 1979. Although a number of studies points towards education in itself not being relevant to the wage level but that education acts as a signal of ability to employers (Jeager and Page 1996). Marriage Historically, literature finds that married men generally earn more than their single counterparts with Antonovics and Town (2004) providing evidence that the marital wage premium is 19%. Using a similarShow MoreRelatedThe Context Of Growing Economic Interdependence1672 Words   |  7 Pages(globalisation); inequality is both growing within and between nations. In turn, analysing the following the following statement that â€Å"Inequality can undermine economic, social and perhaps even political stability. It can tear the very fabric that holds society together. 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