Industrial Change and Wage Inequality: Evidence from the Steel Industry

Abstract

The empirical analysis in this paper, which draws on Current Population Survey data, indicates that structural decline in the steel industry during the 1980s markedly affected the distribution of wages both in the industry and in steel-producing communities. The steelworker wage distribution experienced both a drop in the mean and an increase in the variance, becoming very similar to the distribution of wages in other durable goods manufacturing industries. Declines in steel employment substantially increased wage inequality in steel-producing communities, even among workers not employed in steel.