A Longitudinal Analysis of Within-Education-Group Earnings Inequality

Magnus Gustavsson ()

No 2008:14, Working Paper Series from Uppsala University, Department of Economics

Abstract: Using a large Swedish longitudinal database for the period 1982–2005, I estimate and compare within-group inequality in persistent and transitory earnings among men with high-school and college degrees. Analyses of inequality over the life cycle reveal that experience-variance profiles of persistent earnings are very similar across the two education groups and also consistent with standard human capital models of on-the-job training. Transitory earnings shocks display a marked U-shaped variance pattern over the life-cycle for both groups, but are clearly larger for high-school graduates and also account for a larger proportion of their overall variance. Analyses of changes in within-group inequality over time, holding life-cycle effects constant, show that high-school and college graduates have been subject to similar trend growths in both persistent and transitory earnings differentials between 1982 and 2005.

Keywords: Permanent inequality; Earnings instability; Life-cycle earnings; Schooling (search for similar items in EconPapers)
JEL-codes: C33 D31 J39 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
Date: 2008-12-05

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Persistent link: http://EconPapers.repec.org/RePEc:hhs:uunewp:2008_014

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