Compensation Inequality

Abstract

This paper documents changing inequality in employer-provided fringe benefits in the United States using much more comprehensive data than previously available. Inequality growth in broader measures of compensation slightly exceeds wage inequality growth over the 1981–1997 period. Employer costs due to paid leave, pensions, and health insurance fell for low wage labor and rose for high wage labor over this period. The findings suggest income effects as a contributory factor in the relative decline of fringe benefits among low wage workers.