ABSTRACT
Income inequality has been rising in the U.S. since the late 1970s, with most of the increase since the early 1990s being at the top of the income distribution. Some attribute the increase primarily to technical factors that have increased demand for education, but others argue that this explanation is implausible: technical change is global in character, and yet earnings inequality rose much more rapidly in the U.S. than in other industrialized countries. This anomaly has led scholars to argue that the explanation for inequality trends must involve institutional arrangements that determine the setting of pay (Ebbinghaus and Kittel, 2005; Kenworthy, 2007), the terms of employment (DiPrete et al., 2006; Maurin and Postel-Vinay, 2005), and, more abstractly, the level of “rent” that can be extracted from specific classes and occupations (Sørensen, 2000; Weeden, 2002; Morgan and Tang, 2007). 1
