EconPapers    
Economics at your fingertips  
 

Performance pay, the marriage market and rising income inequality in Taiwan

Shao-Hsun Keng () and Peter Orazem ()
Additional contact information
Shao-Hsun Keng: National University of Kaohsiung

Review of Economics of the Household, 2019, vol. 17, issue 3, 969-992

Abstract: Abstract Taiwan expanded its college access significantly over the past two decades by converting 2-year junior colleges to 4-year colleges and relaxing entrance standards. The share of college graduates in the 22–24 years old population rose from 12 to 71% between 1990 and 2014. This should have suppressed returns to schooling and lowered household income inequality. Instead, Taiwan’s Gini coefficient rose. We show that rising use of performance pay and positive assortative mating in the marriage market jointly increase the household income inequality by 46.5% between 1980 and 2014. Our results suggest that uneven quality of the most recent cohorts of college graduates led to two sources of rising household income inequality: the increased use of bonus pay which increases residual inequality among college graduates; and matching on unobserved skills in the marriage market which increases inequality among married couples.

Keywords: Positive assortative mating; Income inequality; Performance pay; Education expansion; Female labor force participation; I2; I25; J01; J12; J24; J31 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11150-018-9434-0 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Performance Pay, the Marriage Market and Rising Income Inequality in Taiwan (2017) Downloads
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: https://EconPapers.repec.org/RePEc:kap:reveho:v:17:y:2019:i:3:d:10.1007_s11150-018-9434-0

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11150/PS2

Access Statistics for this article

Review of Economics of the Household is currently edited by Shoshana Grossbard

More articles in Review of Economics of the Household from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-12-06
Handle: RePEc:kap:reveho:v:17:y:2019:i:3:d:10.1007_s11150-018-9434-0