The influence of earnings on income distribution in the United States

This article discusses whether the so called “skill-biased technological change” hypothesis is able to explain the individual earnings inequality in the U.S. during the period 1968-2000. Using the statistic information supplied by the Census Bureau and the Bureau of Labor Statistics, the article analyzes the earnings evolution, explaining the reasons why earnings inequality has increased, and the relation of this increase with the household income distribution. The main conclusions are the following: (a) changes on labor productivity are not the main cause of the increase in earnings' inequality, and (b) this earnings' inequality is not the only reason for the increase of the households' income inequality.