Greater Wage Inequality Reduces Average Hours of Work

23 Pages Posted: 19 Sep 2012

See all articles by Urban Sila

Urban Sila

Organization for Economic Co-Operation and Development (OECD)

Date Written: October 2012

Abstract

I argue that rising inequality in offered wages lowers average working hours. If labour supply is concave in wages, a decrease in the working hours of low‐paid workers is greater than an increase in working hours of high‐paid workers. Furthermore, due to low market opportunities, some low‐paid workers may leave the labour force. Using CPS‐MORG data for prime‐age men, I find evidence in support of this explanation. I establish empirically the concavity of the labour supply and find evidence that after controlling for the average wage, wage inequality has a negative effect on labour supply.

Suggested Citation

Sila, Urban, Greater Wage Inequality Reduces Average Hours of Work (October 2012). Economica, Vol. 79, Issue 316, pp. 680-702, 2012, Available at SSRN: https://ssrn.com/abstract=2149049 or http://dx.doi.org/10.1111/j.1468-0335.2012.00933.x

Urban Sila (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
238
PlumX Metrics