The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data
Centre for Monetary and Financial Studies (CEMFI)
Bank of Spain - Research Department
July 3, 2012
Banco de Espana Working Paper No. 1225
We use detailed information on labor earnings and employment from Social Security records to document earnings inequality in Spain from 1988 to 2010. Male earnings inequality was strongly countercyclical: it increased around the 1993 recession, showed a substantial decrease during the 1997-2007 expansion and then a sharp increase during the recent recession. These developments were partly driven by the cyclicality of employment and earnings in the lower-middle part of the distribution. We emphasize the importance of the housing boom and subsequent housing bust, and show that demand shocks in the construction sector significantly impacted aggregate labor market outcomes.
Number of Pages in PDF File: 68
Keywords: Earnings inequality, social security data, unemployment, business cycle
JEL Classification: D31, J21, J31working papers series
Date posted: July 3, 2012
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