When Supply Meets Demand: Wage Inequality in Portugal

Mário Centeno () and Alvaro A. Novo ()
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Alvaro A. Novo: Banco de Portugal

No 4592, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Wage inequality in Portugal increased over the last quarter of century. The period from 1982 to 1995 witnessed strong increases in both upper- and lower-tail inequality. A shortage of skills combined with skill-biased technological changes are at the core of this evolution. Since 1995, lower-tail inequality decreased, while upper-tail inequality increased at a slower rate. The supply of high-skilled workers more than doubled during this period, contributing significantly to the slowdown. Polarization of employment demand is the more credible explanation for the more recent evolution. As in other developed economies, for instance Germany and the United States, we show that institutions played a minor role in shaping changes in inequality.

Keywords: institutions; inequality; polarization; supply; demand (search for similar items in EconPapers)
JEL-codes: D3 J3 O3 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2009-11
New Economics Papers: this item is included in nep-dev and nep-lab
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Citations: View citations in EconPapers (10)

Published - published in: IZA Journal of European Labor Studies, 2014, 3 (23)

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