Applying the Decomposition of the Foster and Wolfson Bipolarization Index to Earnings Functions

Elena Barcena-Martin and Jacques Silber

A chapter in Inequality, Taxation and Intergenerational Transmission, 2018, vol. 26, pp 63-88 from Emerald Group Publishing Limited

Abstract: This chapter shows that the algorithm recently proposed to decompose the Foster and Wolfson bipolarization index by income sources (seeBárcena-Martin, Deutsch, & Silber, forthcoming) may be extended to break down wage bipolarization by its determinants. The chapter gives an empirical illustration comparing the determinants of wage bipolarization and inequality in various European countries in 2011, with a special focus on Portugal. In Portugal higher levels of education are the main source of bipolarization and inequality. Gender and working in the public sector are important determinants of bipolarization while age and having a temporary job are important determinants of inequality.

Keywords: Bipolarization; earnings function; Foster and Wolfson polarization index; income sources; inequality; SILC data; D31; D63; J31 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:reinzz:s1049-258520180000026005

DOI: 10.1108/S1049-258520180000026005

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