Hipolito, Simon (2008): International Differences in Wage Inequality: A New Glance with European Matched Employer-Employee Data.
Download (339Kb) | Preview
Using unique international harmonized matched employer-employee microdata from the European Structure of Earnings Survey for nine representative European countries, this comparative study examines the origin of international differences in wage inequality. Our novel evidence uncovers that global wage inequality is highly correlated with the magnitude of inter-firm wage differentials and that workplace- and job-related factors generally have a more significant impact on within-country wage inequality than individual characteristics. On the whole, European countries exhibit considerably different wage structures: they differ significantly not only in the extent of wage inequality but also in the relative influence of factors shaping wage inequality. Comparative analyses reveal that although cross-country differences in labour force composition play a part in the explanation, differences in distribution and, very specially, in labour market prices of workplace and job characteristics are primary reasons contributing to international differences in wage inequality.
|Item Type:||MPRA Paper|
|Original Title:||International Differences in Wage Inequality: A New Glance with European Matched Employer-Employee Data|
|Keywords:||Wage inequality; matched employer-employee data|
|Subjects:||J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General
|Depositing User:||HIPOLITO SIMON|
|Date Deposited:||26. Mar 2008 10:11|
|Last Modified:||20. Feb 2013 12:56|
Aagard, A.; Eriksson, T.; Westergaard-Nielsen, N. (2007): “Wage and Labour Mobility in Denmark, 1980-2000”, en E. Lazear and K. Shaw (eds.), Wage Structure, Raises and Mobility: International Comparisons of the Structure of Wages Within and Across Firms, ed. University of Chicago Press (forthcoming).
Abowd, J.M.; Kramarz, F. (1999): “The Analysis of Labour Markets Using Matched Employer-Employee Data”, in O. Ashenfelter and D. Card (ed.) Handbook of Labour Economics, ed. North-Holland.
Abowd, J.M.; Kramarz, F.; Margolis, D.N.; Troske, K. (2001): “The Relative Importance of Employer and Employee Effects on Compensation: A Comparison of France and the United States”, Journal of the Japanese and International Economics, No 15, pp. 419-436.
Amuedo-Dorantes, C.; De la Rica, S. (2006): “The Role of Segregation and Pay Structure on the Gender Wage Gap: Evidence from Matched Employer-Employee Data for Spain”, Contributions to Economic Analysis & Policy, 5(1), pp. 1-32. Battu, H.; Belfield, C.R.; Sloane, P.J. (2003): “Human Capital Spill-Overs Within the Workplace”, Oxford Bulletin of Economics and Statistics, 65, pp. 575-594.
Bayard, K.; Hellerstein, J.; Neumark, D.; Troske, K. (2003): “New evidence on sex segregation and sex differences in wages from matched employee-employer data”, Journal of Labor Economics, vol. 21, nº 4, pp. 887-922.
Blau, F.D.; Kahn, L.M. (1996): “International Differences in Male Wage Inequality: Institutions versus Market Forces”, Journal of Political Economy, 101(4), pp. 791-837.
Blau, F.D.; Kahn, L.M. (1999): “Institutions and Laws in the Labour Market”, in O. Ashenfelter and D. Card (ed.) Handbook of Labour Economics, ed. North-Holland.
Blau, F.D.; Kahn, L.M. (2005): “Do cognitive test scores explain higher US wage inequality?”, The Review of Economics and Statistics, 87(1), pp. 184-193.
Cardoso, A.R. (1999): “Firms’ wage policies and the rise in labour market inequality: The case of Portugal”, Industrial and Labour Relations Review, Vol. 53(1), pp. 87-102.
Davis, S.J.; Haltiwanger, J. (1991): “Wage Dispersion between and within US Manufacturing Plants, 1963-86”, Brooking Papers on Economic Activity, Special Issue, pp. 115-80.
Devroye, D.; Freeman, R. (2002): “Does Inequality in Skills Explain Inequality of Earnings Across Advanced Countries?”, CEP Discussion Papers 0552.
Dunne, T.; Foster, L.; Haltiwanger, J.; Troske, K. (2004): “Wage and Productivity Dispersion in United States Manufacturing: The Role of Computer Investment”, Journal of Labour Economics, 22(2), pp. 397-429.
European Commission (2004): Industrial Relations in Europe 2004.
European Industrial Relations Observatory (2002): “Industrial relations in the EU Member States and candidate countries”, available in http://www.eiro.eurofound.eu.int.
European Industrial Relations Observatory (2005): “Minimum wages in Europe”, available in http://www.eiro.eurofound.eu.int.
Eurostat (2003): Employment in Europe. 2003.
Eurostat (2005): Employment in Europe. 2005.
Fields, G.S. (2003): “Accounting for Income Inequality and its Change: A New Method with Application to U.S. Earnings Inequality” in S.W. Polacheck (ed.), Research in Labour Economics, Vol. 22: Worker Well-Being and Public Policy, Oxford, pp. 1–38.
Foster, J.; Ok, E. (1999): “Lorenz dominance and the variance of logarithms”', Econometrica, 67(4), pp. 901-8. Freeman, R. (2007): “Labour market institutions around the world”, NBER Working Paper 13242.
Goux, D.; Maurin, E. (1999): “Persistence of Inter-industry Wage Differentials: A Re-examination Using Matched Worker-Firm panel Data”, Journal of Labor Economics, vol. 17, nº 3, pp. 492-533.
Groshen, E.L. (1991): “Five Reasons Why Wages Vary Among Employers”, Industrial Relations, vol. 30, nº 4, pp. 350-381.
Haltiwanger, J.C., Lane, J., Spletzer, J.R., Theeuwes, J.J. and K. Troske (1999): The Creation and Analysis of Employer-Employee Matched Data, ed. North-Holland, Amsterdam.
Hamermesh, D. (2007): “Fun with matched firm-employee data: Progress and road maps”, Labour Economics (doi:10.1016/j.labeco.2007.05.004).
Juhn, C., Murphy, K.; Pierce, B. (1993): “Wage inequality and the rise in returns to skill”, Journal of Political Economy, 101(31), pp. 410-442.
Katz, L.F.; Autor, D.H. (1999): “Change in the Wage Structure and Earnings Inequality”, in O. Ashenfelter and D. Card (ed.) Handbook of Labour Economics, ed. North-Holland.
Lallemand, T.; Plasman, R.; Rycx, F. (2007): “The Establishment-Size Wage Premium: Evidence from European Countries”, Empirica, vol. 34, no. 5, pp. 427-451.
Lane, J. (2008): “Inequality and the Labour Market: Employers,” in B. Nolan, W. Salverda and T. Smeeding (eds.) Handbook of Income Inequality, ed. Oxford University Press (forthcoming).
Lazear, E.; Shaw, K. (2007): “Wage Structure, Raises and Mobility: International Comparisons of the Structure of Wages Within and Across Firms”, NBER Working Paper 13654.
Leuven, E.; Oosterbeek, H. (2004): “Explaining international differences in male wage inequality by differences in demand and supply of skill”, Economic Journal, 144, pp. 478-498. Nickell, S. and Layard, R. (1999): “Labour market institutions and economic performance”, O. Ashenfelter and D. Card (eds.) Handbook of Labour Economics, ed. North-Holland.
Nordström-Skans, O.; Edin, P.; Homlund, B. (2007): “Wage Dispersion Between and Within Plants: Sweden 1985-2000”, en E. Lazear and K. Shaw (eds.), Wage Structure, Raises and Mobility: International Comparisons of the Structure of Wages Within and Across Firms, ed. University of Chicago Press (forthcoming).
OECD (2004): Employment Outlook 2004.
OECD (2007): Employment Outlook 2007.
Peracchi, F. (2006): “Educational Wage Premia and the Distribution of Earnings: An International Perspective”, in E. Hanushek and F. Welch (eds.) Handbook of the Economics of Education, ed. North-Holland.
Plasman R., Rusinek M. and Rycx F. (2007): “Wages and the Bargaining Regime under Multi-level Bargaining: Belgium, Denmark and Spain”, European Journal of Industrial Relations, vol. 13, pp. 161–180.
Rubery, J.; Grimshaw, D. and Figuereido, H. (2002): “The Gender Pay Gap and Gender Mainstreaming Pay Policy in EU Member States”, Report for the Equal Opportunities Commission of the European Union.
Rutkowski, J. J. (2001): “Earnings inequality in Transition Economies of Central Europe, Trends and Patterns During the 1990s”, Social Protection Discussion Paper Series n°117, World Bank.
Sen, A. (1973): On Economic Inequality, ed. Oxford University Press.
Shorrocks, A.F. (1982): “Inequality Decomposition by Factor Components,” Econometrica, 50(1), pp. 193–211.
Simón, H. (2005): “Employer Wage Differentials from an International Perspective”, Economics Letters, 88(2), pp. 284-288.
Yun, M.S. (2006): “Earnings Inequality in the USA, 1961–1999: Comparing Inequality Using Earnings Equations”, Review of Income and Wealth, 52(1), pp. 127-144.