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Baby booming inequality? Demographic change and earnings inequality in Norway, 1967–2000

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  • Ingvild Almås

    ()

  • Tarjei Havnes

    ()

  • Magne Mogstad

    ()

Abstract

In this paper, we demonstrate how age-adjusted inequality measures can be used to evaluate whether changes in inequality over time are due to changes in the age structure. To this end, we use administrative data on earnings for every male Norwegian during 1967-2000. We find that the substantial rise in earnings inequality over the 1980s and into the early 1990s, is to some extent driven by the fact that the large baby boom cohorts are approaching the peak of the age-earnings profile. We further demonstrate that the impact of age adjustments on the trend in inequality during the period from 1993-2000 is highly sensitive to the method used: while the most widely used age-adjusted inequality measure indicates little change in inequality over this period, a new and improved age-adjusted measure suggests a decline in inequality.

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Bibliographic Info

Article provided by Springer in its journal The Journal of Economic Inequality.

Volume (Year): 9 (2011)
Issue (Month): 4 (December)
Pages: 629-650

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Handle: RePEc:kap:jecinq:v:9:y:2011:i:4:p:629-650

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Web page: http://springerlink.metapress.com/link.asp?id=111137

Related research

Keywords: Inequality trend; Age structure; Age–earnings profile; Gini coefficient; D31; D63; D91; E21;

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  1. James J. Heckman & Lance J. Lochner & Petra E. Todd, 2008. "Earnings Functions and Rates of Return," NBER Working Papers 13780, National Bureau of Economic Research, Inc.
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  12. Almås, Ingvild & Mogstad, Magne, 2010. "Older or Wealthier? The Impact of Age Adjustment on Cross-Sectional Inequality Measures," Discussion Paper Series in Economics 9/2010, Department of Economics, Norwegian School of Economics.
  13. Paglin, Morton, 1979. "The Measurement of Inequality: Reply," American Economic Review, American Economic Association, vol. 69(4), pages 673-77, September.
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  19. Almås, Ingvild & Cappelen, Alexander W. & Lind, Jo Thori & Sørensen, Erik Ø. & Tungodden, Bertil, 2011. "Measuring unfair (in)equality," Journal of Public Economics, Elsevier, vol. 95(7), pages 488-499.
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Cited by:
  1. Aaberge, Rolf & Mogstad, Magne, 2010. "Robust Inequality Comparisons," IZA Discussion Papers 4769, Institute for the Study of Labor (IZA).
  2. Ingvild Almås & Magne Mogstad, 2009. "Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries," Discussion Papers 583, Research Department of Statistics Norway.
  3. Bönke, Timm & Corneo, Giacomo & Lüthen, Holger, 2011. "Lifetime Earnings Inequality in Germany," IZA Discussion Papers 6020, Institute for the Study of Labor (IZA).

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