Inequality and polarization of male earnings in the United States, 1968–1990

In this paper we examine trends in inequality and polarization of U.S. male earnings using recently developed techniques of statistical inference to test for distributional changes. We find that earnings inequality of male paid workers increased between 1968 and 1990. Decile mean real earnings fell in deciles 1–7 and rose in deciles 9 and 10 over this period. Changes in the distribution of earnings may be characterized by a decline of the “middle” and increased polarization. A combination of trend and cyclical factors appears to drive changes in the middle-class shares and polarization shares and the effect of the cyclical factors varies between the 1970s and 1980s.