Download This PaperDecomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation
40 Pages Posted: 1 Jun 2006 Last revised: 27 Oct 2011
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Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation
Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation
Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation
Date Written: 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.
Keywords: matched employer-employee data, earnings inequality, job reallocation, worker reallocation, firm entry, firm exit
JEL Classification: J00, J63, J31
Suggested Citation: Suggested Citation
Julia Lane
Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
HOME PAGE: http://www.iza.org
Wagner Graduate School of Public Service ( email )
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New York, NY 10012
United States
Per Fredrik Daniel Andersson
Office of the Comptroller of the Currency (OCC) ( email )
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Washington, DC 20219-0001
United States
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