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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.

Suggested Citation

  • Ingvild Almås & Tarjei Havnes & Magne Mogstad, 2010. "Baby Booming Inequality? Demographic Change and Earnings Inequality in Norway, 1967-2000," CESifo Working Paper Series 3200, CESifo.
    • Handle: RePEc:ces:ceswps:_3200
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    Cited by:

    1. Aaberge, Rolf & Mogstad, Magne & Peragine, Vito, 2011. "Measuring long-term inequality of opportunity," Journal of Public Economics, Elsevier, vol. 95(3), pages 193-204.
    2. Timm Bönke & Giacomo Corneo & Holger Lüthen, 2015. "Lifetime Earnings Inequality in Germany," Journal of Labor Economics, University of Chicago Press, vol. 33(1), pages 171-208.
    3. Frank Cowell & Emmanuel Flachaire & Sanghamitra Bandyopadhyay, 2013. "Reference distributions and inequality measurement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(4), pages 421-437, December.
    4. Laura A. Harvey & Jochen O. Mierau & James Rockey, 2017. "Inequality in an Equal Society," LWS Working papers 26, LIS Cross-National Data Center in Luxembourg.
    5. Pierre Desrochers & Vincent Geloso & Joanna Szurmak, 2021. "Care to Wager Again? An Appraisal of Paul Ehrlich's Counterbet Offer to Julian Simon, Part 2: Critical Analysis," Social Science Quarterly, Southwestern Social Science Association, vol. 102(2), pages 808-829, March.
    6. Marta Escalonilla & Begoña Cueto & María José Pérez-Villadóniga, 2022. "Is the Millennial Generation Left Behind? Inter-Cohort Labour Income Inequality in a Context of Economic Shock," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 285-321, November.
    7. Tammy Schirle, 2012. "Age-adjusted measures of earnings inequality in the United States, 1980-2010," Economics Bulletin, AccessEcon, vol. 32(3), pages 2662-2669.
    8. Alexandre Gori Maia & Camila Sakamoto, 2016. "The Impacts Of Changing Family Structure On Income, Inequality And Poverty," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 219, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

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    More about this item

    Keywords

    inequality trend; age structure; age-earnings profile; Gini coefficient;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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