Abstract

http://ssrn.com/abstract=905006
 
 

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


Julia Lane


Wagner Graduate School of Public Service; Institute for the Study of Labor (IZA)

Fredrik Andersson


Office of the Comptroller of the Currency (OCC)

Elizabeth E. Davis


University of Minnesota - Department of Applied Economics

Matthew Freedman


Drexel University

Brian P. McCall


University of Minnesota - Twin Cities - Carlson School of Management

Lee Kristin Sandusky


U.S. Census Bureau

October 27, 2011


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: 40

Keywords: matched employer-employee data, earnings inequality, job reallocation, worker reallocation, firm entry, firm exit

JEL Classification: J00, J63, J31


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Date posted: June 1, 2006 ; Last revised: October 27, 2011

Suggested Citation

Lane, Julia and Andersson, Fredrik and Davis, Elizabeth E. and Freedman, Matthew and McCall, Brian P. and Sandusky, Lee Kristin, Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation (October 27, 2011). Available at SSRN: http://ssrn.com/abstract=905006 or http://dx.doi.org/10.2139/ssrn.905006

Contact Information

Julia Lane
Wagner Graduate School of Public Service ( email )
The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
HOME PAGE: http://www.iza.org

Per Fredrik Daniel Andersson
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 (Contact Author)
Drexel University ( email )
3141 Chestnut St
Philadelphia, PA 19104
United States
Brian P. McCall
University of Minnesota - Twin Cities - Carlson School of Management ( email )
19th Avenue South
Minneapolis, MN 55455
United States
Lee Kristin Sandusky
U.S. Census Bureau ( email )
4600 Silver Hill Road
Washington, DC 20233
United States
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