Tuesday, May 29, 2007

More on Wage Inequality

http://www.mcgill.ca/files/economics/performancepayand.pdf

Explains a quarter of the growth in male income inequality. I'd reckon that paying bonuses to people for more work also contributes a bit to the leisure inequality growth as well: If you get paid more as you work more, you're going to get to paid more AND work more.

In this way, it appears our economy could probably solve a bit of inequality by directly tying performance to salary, and somehow introducing more dynamism into the economy that would allow people to work more hours if they so choose to (although studies conclude that most American would rather work less...)

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