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Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation

Fredrik Andersson (), Elizabeth Davis, Matthew Freedman, Julia Lane (), Brian McCall () and Kristin Sandusky
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Fredrik Andersson: Lund University

No 6182, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper exploits longitudinal employer-employee matched data from the U.S. Census Bureau to investigate the contribution of worker and firm reallocation to changes in earnings inequality within and across industries between 1992 and 2003. We find that factors that cannot be measured using standard cross-sectional data, including the entry and exit of firms and the sorting of workers across firms, are important sources of changes in earnings distributions over time. Our results also suggest that the dynamics driving changes in earnings inequality are heterogeneous across industries.

Keywords: inequality; linked employer-employee data; sorting (search for similar items in EconPapers)
JEL-codes: J0 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-lab and nep-lma
Date: 2011-11
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Related works:
Journal Article: Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation (2012) Downloads
Working Paper: Decomposing the Sources of Earnings Inequality: Assessing the Role of Reallocation (2010) Downloads
Working Paper: Decomposing the Sources of Earnings Inequality Assessing the Role of Reallocation Downloads
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