Market Failure and the Spectacular Rise in Inequality

Abstract

We typically understand inequality as a by-product of a smoothly functioning labor market in which the rise of skill-demanding technologies increases the demand for skilled labor and bids up the price for skilled labor. This account, which stresses simple supply and demand forces, has inequality playing the role of message-deliverer to labor, the message being to “get skill.” The core purpose of the speaker's research is to build an alternative model that estimates how market failure in the form of rent-seeking explains much of the takeoff in inequality.

About the speaker

Prof. David Grusky is Professor of Sociology at Stanford University, Director of the Center for the Study of Poverty and Inequality, co-editor of Pathways Magazine, and co-editor of the Stanford University Press Social Inequality Series. He is a Fellow of the American Association for the Advancement of Science, recipient of the 2004 Max Weber Award, founder of the Cornell University Center for the Study of Inequality, and a former Presidential Young Investigator. His research takes on such questions as whether and why gender, racial, and class-based inequalities are growing stronger and how such differences are best measured.