Changes in the Appalachian Wage Gap, 1970 to 2000

Since at least 1960, Appalachians have lower wages, employment rates, and educational attainment than residents elsewhere in the country. Despite educational gains and large federal outlays since 1965, the wage gap has only slightly decreased. Using a sample of full-time workers from the Integrated Public Use Microdata Series Census project, I identify factors affecting the wage gap between 1970 and 2000. I find several national trends unfavorable to Appalachians after 1980: increasing returns to both observable and unobservable skill, rising income inequality, and the decline of manufacturing, which offset faster Appalachian education growth. There is also a growing gap in education returns between Appalachia and elsewhere in the country since 1980.