The increasing proportion of men with low earnings in the United States

This study has provided an examination of recent changes in the lower tail of the male earnings distribution. Data from the CPS for 1967 through 1978 were used to analyze the increasing proportion of male workers with annual and weekly earnings below a fixed low earnings threshold. Our central purpose was to assess the extent to which the growth in the probability of low earnings could be explained by the more salient changes in the structure of the male labor force over this period. To this end, logit analysis was used to examine the roles of education, experience, cyclical conditions, and cohort size in explaining variations in the probability of subthreshold earnings, conditional on experience and education. The estimates generally yielded the expected effects. However, the most important findings from our analysis concern the trends estimated net of education, experience, unemployment, and cohort size. These variables appear to explain satisfactorily the recent growth in the proportion of men with low earnings among those with at least sixteen years of education. For all other educational categories, our independent variables were unable to account for a major portion of the growth in the probability of low earnings. Our results supplement previous findings of positive trends for mean annual and weekly earnings net of a similar set of independent variables. Hence, we have provided substantial evidence of stagnation in the lower tail of the male earnings distribution--a stagnation not shared by the average worker nor fully explicable by education, experience, aggregate unemployment, or the entrance of the baby boom cohort into the labor market. Investigation of alternative explanations for this phenomenon, such as changes in female labor supply or the structure of labor demand, is clearly warranted.