The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data

64 Pages Posted: 30 Jun 2012

See all articles by Stephane Bonhomme

Stephane Bonhomme

Centre for Monetary and Financial Studies (CEMFI)

Laura Hospido

Banco de España - Research Department

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Abstract

We use detailed information on labor earnings and employment from social security records to document the evolution of 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. This evolution was 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 had large effects on aggregate labor market outcomes.

Keywords: earnings inequality, social security data, unemployment, business cycle

JEL Classification: D31, J21, J31

Suggested Citation

Bonhomme, Stephane and Hospido, Laura, The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data. IZA Discussion Paper No. 6669, Available at SSRN: https://ssrn.com/abstract=2096799

Stephane Bonhomme (Contact Author)

Centre for Monetary and Financial Studies (CEMFI) ( email )

Casado del Alisal 5
28014 Madrid
Spain

Laura Hospido

Banco de España - Research Department ( email )

Alcala 48
Madrid, 28014
Spain
+34 913385625 (Phone)
+34 913385678 (Fax)

HOME PAGE: http://www.laurahospido.com/

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