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Inequality for Wage Earners and Self-Employed: Evidence from Panel Data

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  • Pedro Albarran
  • Raquel Carrasco
  • Maite Martinez-Granado

Abstract

In this paper we highlight the importance of analysing the evolution of income inequality separately for employees and self-employed workers. Using Spanish panel data on income and consumption for the period 1987-96, we find noticeable differences across these groups in the evolution of income inequality, and in the relative importance of the transitory and permanent components of income variance. The evolution of inequality is mainly explained by movements in the transitory component for the self-employed and by the permanent component for the employees. Our results suggest that different policies should be implemented for each group. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2009.

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Bibliographic Info

Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 71 (2009)
Issue (Month): 4 (08)
Pages: 491-518

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Handle: RePEc:bla:obuest:v:71:y:2009:i:4:p:491-518

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  1. McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, Elsevier, vol. 8(2), pages 191-210, October.
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  5. Primiceri, Giorgio E. & van Rens, Thijs, 2009. "Heterogeneous life-cycle profiles, income risk and consumption inequality," Journal of Monetary Economics, Elsevier, Elsevier, vol. 56(1), pages 20-39, January.
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  7. Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(3), pages 445-67, June.
  8. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(3), pages 604-631, June.
  9. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 34(4), pages 1797-1855, December.
  10. Richard Blundell & Ian Preston, 1998. "Consumption Inequality And Income Uncertainty," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(2), pages 603-640, May.
  11. Martinez-Granado, Maite, 2002. "Self-Employment and Labour Market Transitions: A Multiple State Model," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3661, C.E.P.R. Discussion Papers.
  12. Jean-Marc Falter, 2007. "Self-employment and earning inequality," Journal of Income Distribution, Journal of Income Distribution, Journal of Income Distribution, vol. 16(2), pages 106-127, June.
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  15. Javier Alvarez, 2004. "Dynamics and Seasonality in Quarterly Panel Data: An Analysis of Earnings Mobility in Spain," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 22, pages 443-456, October.
  16. Albarran, P., 2000. "Income Uncertainty and Precautionary Saving: Evidence from Household Rotating Panel Data," Papers, Centro de Estudios Monetarios Y Financieros- 0008, Centro de Estudios Monetarios Y Financieros-.
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Cited by:
  1. Jens Holscher & Cristiano Perugini & Fabrizio Pompei, 2011. "Wage inequality, labour market flexibility and duality in Eastern and Western Europe," Post-Communist Economies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 23(3), pages 271-310.
  2. repec:iab:iabzaf:v:41:i:2/3:p:119-137 is not listed on IDEAS
  3. Ada Ferrer-i-carbonell & X. Ramos & M. Oviedo, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Spain," GINI Country Reports, AIAS, Amsterdam Institute for Advanced Labour Studies spain, AIAS, Amsterdam Institute for Advanced Labour Studies.
  4. Josep Pijoan-Mas & Virginia Sánchez-Marcos, 2009. "Spain Is Different: Falling Trends Of Inequeality," Working Papers, CEMFI wp2009_0910, CEMFI.
  5. Philipp Eisenhauer & Friedhelm Pfeiffer, 2008. "Assessing Intergenerational Earnings Persistence among German Workers," SOEPpapers on Multidisciplinary Panel Data Research 134, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Gaetano Martino & Cristiano Perugini, 2008. "Income inequality within European regions: determinants and effects on growth," Quaderni del Dipartimento di Economia, Finanza e Statistica, Università di Perugia, Dipartimento Economia, Finanza e Statistica 52/2008, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  7. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
  8. Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.

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