Labour-Market Institutions and the Dispersion of Wage Earnings

Arbeitspapier

Considering the contribution of the distribution of individual wages and earnings to that of household incomes we find two separate literatures that should be brought together, and bring 'new institutions' into play. Growing female employment, rising dual-earnership and part-time employment underline its relevance. We discuss the measurement of wage inequality, data sources, and stylized facts of wage dispersion for rich countries. The literature explaining the dispersion of wage rates and the role of institutions is evaluated, from the early 1980s to the recent literature on job polarization and tasks as well as on the minimum wage. Distinguishing between supply-and-demand approaches and institutional ones, we find the former challenged by the empirical measurement of technological change and a risk of ad hoc additions, without realizing their institutional preconditions. The institutional approach faces an abundance of institutions without a clear conceptual delineation of institutions and their interactions. Empirical cross-country analysis of the correlation between institutional measures and wage inequality incorporates unemployment and working hours dynamics, discussing the problems of matching individuals to their relevant institutional framework. Minimum wage legislation and active labour market policies come out negatively correlated to earnings inequality in US and EU countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8220

Classification and Topics

• Classification: Wirtschaft ; Institutions: Design, Formation, Operations, and Impact ; Household Production and Intrahousehold Allocation ; Personal Income, Wealth, and Their Distributions ; Time Allocation and Labor Supply ; Wage Level and Structure; Wage Differentials ; Trade Unions: Objectives, Structure, and Effects ; Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining
• Subject: labour-market institutions ; household labour supply ; hourly wages ; hours worked ; annual earnings ; dispersion ; inequality measures ; household incomes ; minimum wage ; unions ; employment protection

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Salverda, Wiemer ; Checchi, Daniele
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/98984
• Last update: 10.03.2025, 11:41 AM CET