Education Classes and Wage Inequality among US Workers:1950-2009

Abstract

A considerable amount of research consistently finds is that the better educated, generally, earn more than the less educated. It is also believed that better work and technical skills are linked to education. For these and other reasons, researchers and policy makers have long pushed for increasing the educational attainment of the American population. And, indeed, over the 20th Century, the American population has become highly educated to the point where a high school education is no longer seen as a path to better economic status. Rather, a college degree has taken that role. Since about mid-20th century more Americans are going to college, and this may have important implications for income inequality? In this paper, I examine income inequality among four education classes (ECs): those with less than a High School Diploma, those with a High School Diploma, those with some college, and those with a college degree or more. I compute Gini Coefficients for all four groups for the years 1950 to 2009 using the Decennial Census and the 2009 American Community Survey. I also present a brief analysis about the contribution each EC makes to the overall Gini Index. My results point out that income inequality was initially driven by those with less than a high school education, was passed onto those with a high school diploma, and in recent years has greatly increased due to those with a college education. Moreover, I found that wage inequality was greater among the college educated than among the other ECs.