Long-Run Stagnation in US Real Wages: An Unconditional Quantile Approach

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Citation

Harvey, Laura and Rockey, James, Long-Run Stagnation in US Real Wages: An Unconditional Quantile Approach (December 12, 2024). Available at SSRN: https://ssrn.com/abstract=5080401 or http://dx.doi.org/10.2139/ssrn.5080401

Replaces:

Laura A Harvey & James Rockey, 2025. “Long-Run Stagnation in US Real Wages: An Unconditional Quantile Approach,” University of East Anglia School of Economics Working Paper Series 2020-04, School of Economics, University of East Anglia, Norwich, UK.

Abstract

This paper examines long-run stagnation in real wages and lifetime earnings in the United States, contrasting the experiences the Silent Generation (1925-1945), Baby Boomers (1946-1964), Generation X (1965-1979), and Millennials (1980-1999). Despite significant economic growth, we find persistent stagnation or decline in real wages across generations, with younger cohorts earning less than their predecessors over the lifecycle. Using data from the CPS and employing unconditional quantile regression, we reveal heterogeneous effects across the earnings distribution. Overall, earnings declines are concentrated in the middle of the distribution with increases at the top and the bottom. Declines are particularly large for Millennials. However, this trend masks differences by gender. These declines are driven by falling incomes of men, which outweigh the increases observed for women over the period. We find declines in men’s wages at nearly every quantile for post-Silent generations, with the decline greater in lower quantiles. Increases in women’s real wages have stalled-while Boomers earn more than their Silent Generation equivalents, Millennial women do not earn more than Baby Boomers. We find a similar pattern across races and education levels.