Economics at your fingertips  

The Drivers of Life‐Cycle Wage Inequality in Australia

Owen Freestone ()

The Economic Record, 2018, vol. 94, issue 307, 424-444

Abstract: Why does wage inequality rise with age? Using panel data on male wages, we explore the relative importance of unobserved worker heterogeneity versus random wage shocks in explaining this life‐cycle trend in Australia. While we find significant heterogeneity in wage levels (via differences in starting wages), we find no evidence of systematic heterogeneity in wage growth. Instead, highly persistent wage shocks are found to account entirely for the rise in wage inequality with age. We also find evidence that the upward trend in wage inequality since the early 2000s reflects an increase in permanent rather than transitory wage inequality.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0249

Access Statistics for this article

The Economic Record is currently edited by Paul Miller, Glenn Otto and Martin Richardson

More articles in The Economic Record from The Economic Society of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2019-08-28
Handle: RePEc:bla:ecorec:v:94:y:2018:i:307:p:424-444