Dynamics of earnings and hourly wages in Germany

Arbeitspapier

There is by now a vast number of studies which document a sharp increase in cross-sectional wage inequality during the 2000s. It is often assumed that this inequality is of a permanent nature which in turn is used as an argument calling for government intervention. We examine these claims using a fully balanced panel of full-time employed individuals in Germany from the German Socio-Economic Panel for the years 19942006. In line with previous studies, our sample shows sharply rising inequality during the 2000s. Applying covariance structure models, we calculate the fraction of permanent and transitory wage and earnings inequality. From 1994 on, permanent inequality increases continuously, peaks in 2001 and then declines in subsequent years. Interestingly the decline in the permanent fraction of inequality occurs at the time of most rapid increases in cross-sectional inequality. It seems therefore that it is primarily the temporary and not the permanent component which has driven the strong expansion of cross-sectional inequality during the 2000s in Germany.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 3751

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Thema: Variance decomposition ; covariance structure models ; earnings inequality ; wage dynamics ; Lohnstruktur ; Soziale Ungleichheit ; Soziale Mobilität ; Schätzung ; Arbeitsverhältnis ; Deutschland

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Myck, Michał ; Ochmann, Richard ; Qari, Salmai
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/35781
• URN: urn:nbn:de:101:1-20081114149
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ