Abstract

http://ssrn.com/abstract=1973911
 


 



Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation


Fredrik Andersson


Office of the Comptroller of the Currency (OCC)

Elizabeth E. Davis


University of Minnesota - Department of Applied Economics

Matthew Freedman


Drexel University

Julia Lane


American Institutes for Research; Institute for the Study of Labor (IZA)

Brian P. McCall


University of Minnesota - Twin Cities - Carlson School of Management

Kristin Sandusky


U.S. Census Bureau


IZA Discussion Paper No. 6182

Abstract:     
This paper exploits longitudinal employer-employee matched data from the U.S. Census Bureau to investigate the contribution of worker and firm reallocation to changes in earnings inequality within and across industries between 1992 and 2003. We find that factors that cannot be measured using standard cross-sectional data, including the entry and exit of firms and the sorting of workers across firms, are important sources of changes in earnings distributions over time. Our results also suggest that the dynamics driving changes in earnings inequality are heterogeneous across industries.

Number of Pages in PDF File: 43

Keywords: inequality, linked employer-employee data, sorting

JEL Classification: J0, J30

working papers series


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Date posted: December 17, 2011  

Suggested Citation

Andersson, Fredrik and Davis, Elizabeth E. and Freedman, Matthew and Lane, Julia and McCall, Brian P. and Sandusky, Kristin, Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation. IZA Discussion Paper No. 6182. Available at SSRN: http://ssrn.com/abstract=1973911

Contact Information

Per Fredrik Daniel Andersson (Contact Author)
Office of the Comptroller of the Currency (OCC) ( email )
400 7th St. SW
Washington, DC 20219-0001
United States
202-649-5528 (Phone)
571-465-3246 (Fax)
Elizabeth E. Davis
University of Minnesota - Department of Applied Economics ( email )
1994 Buford Avenue
St. Paul, MN 55108
United States
Matthew Freedman
Drexel University ( email )
3141 Chestnut St
Philadelphia, PA 19104
United States
Julia Lane
American Institutes for Research ( email )
1990 K Street, NW
Washington, DC 20006-1107
United States
Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
HOME PAGE: http://www.iza.org
Brian P. McCall
University of Minnesota - Twin Cities - Carlson School of Management ( email )
19th Avenue South
Minneapolis, MN 55455
United States
Lee K. Sandusky
U.S. Census Bureau ( email )
Washington, DC 20233
United States
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