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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Math matters: education choices and wage inequality
Organization Unit
  • Andrew Rendall
  • Michelle Rendall
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 160
ISSN 1664-7041
Number of Pages 43
Date 2014
Abstract Text SBTC is a powerful mechanism in explaining the increasing gap between educated and uneducated wages. However, SBTC cannot mimic the US within-group wage inequality. This paper provides an explanation for the observed intra-college group inequality by showing that the top decile earners' significant wage growth is underpinned by the link between ex ante ability, math-heavy college majors and highly quantitative occupations. We develop a general equilibrium model with multiple education outcomes, where wages are driven by individuals' ex ante abilities and acquired math skills. A large portion of within-group and general wage inequality is explained by math-biased technical change (MBTC).
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Keywords Wage inequality, SBTC, college majors, occupations, mathematics abilities, Lohnstruktur, Lohngleichheit, Diskriminierung, Lohn, Vergütung, Gehalt, Honorar, Verteilungsgerechtigkeit, Einkommensverteilung, Einkommensunterschied, Bildung, Mathematik