Inequality and ability

Eric D. Gould*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Scopus citations


This paper examines how much the increasing "residual inequality" in the United States can be explained by increasing returns to cognitive skills. Also, this paper uses selection-correction techniques to estimate the latent population distribution of unobservable skill within three occupational sectors, and breaks down the leftover "residual" term into a "general" unobservable component and a sector-specific unobservable component. The results indicate that sector-specific skills have played only a minor role in the inequality trends. Increasing "residual inequality" is mostly characterized by an increasing importance of general skills, either IQ or the general unobservable skill, within all three occupations.

Original languageAmerican English
Pages (from-to)169-189
Number of pages21
JournalLabour Economics
Issue number2
StatePublished - Apr 2005


  • Cognitive skills
  • IQ
  • Wage inequality


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