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Stratification by regulation: Are bootleggers and Baptists biased?

Sean Mulholland

Public Choice, 2019, vol. 180, issue 1, No 7, 105-130

Abstract: Abstract This paper investigates whether and to what extent regulation may be associated with wage inequality. Using regulation measures created by Al-Ubaydli and McLaughlin (Regul Govern 11:109–123, 2017), I find that regulation is associated with larger within-occupation wage inequality. Specifically, I show that a worker at the 90th wage percentile realizes a raise of $1.19 per hour relative to the 10th percentile earner for each standard deviation increase in regulation. That represents a 3.5% raise for a worker at the 90th percentile. Overall, increases in the regulatory burden are associated with 42–45% of the change in the 90th–10th percentile wage ratio from 2002 through 2014.

Keywords: Inequality; Regulation; Income; Wages (search for similar items in EconPapers)
JEL-codes: D31 L51 L11 J31 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11127-018-0597-2

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