Oxford University Press has provided free online access to my chapter, “The Economics of Inequality in High-Wage Economies,” for a limited time in their new book “United States Income, Wealth, Consumption, and Inequality.” In the chapter, I argue,
“Inequality is mostly the result of an increasing premium on returns from risk and high-skilled labor ushered in by technological disruption and the feedback loop of elite talent working to increase their own productivity—a logical outcome when properly trained talent constrains growth. The answer … lies in increasing the ratio of high- to low-skilled workers chiefly by training and recruiting more high-scoring domestic and immigrant workers. Rather than greater income redistribution slowing growth by dampening high-skilled productivity and incentives to innovate, these alternatives would accelerate growth and narrow income inequality by relieving constraints on talent and increasing resources devoted to raising low-skilled productivity.”