May/June 1996

Although the increase in earnings inequality in the 1980s and 1990s has been well documented, its causes are still being studied and debated. Some explanations revolve around changes in job skills, job requirements, and labor market institutions. Other explanations focus on the deteriorating quality of many urban neighborhoods and the increasing economic isolation of their residents. A symposium at the Federal Reserve Bank of Boston on November 17, 1995, brought together experts from labor and urban economics to address the extent to which changes in labor markets and location have contributed to rising inequality. Participants also discussed the effectiveness of policies that may help overcome the problem.