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Abstract

In this article we characterize the evolution of inequality in hourly wages, hours of work, labor earnings, household disposable income and household consumption for Spain between 1985 and 2000. We look at both the Encuesta Continua de Presupuestos Familiares and the European Household Community Panel. Our analysis shows that inequality in individual net labor earnings and household net disposable income has decreased substantially. The decreases in the tertiary education premium and in the unemployment rate have been key ingredients to understand this falling trend. However, the inequality reduction has not been monotonic over the period: while it fell in years of economic expansion, there was an inequality surge in the recession of the early nineties. Public transfers have played a crucial role in smoothing out the inequality arising in the labor market, but instead the Spanish family does not seem to have been an important insurance mechanism. Regarding household consumption, inequality has fallen much less than inequality in household net disposable income, with the decrease mostly concentrated in the second half of the eighties. This suggests that the reduction in income inequality has affected the sources of permanent differences between households only during the second half of the eighties. Our estimates of the earnings process for the period are consistent with this view.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7489.

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Date of creation: Oct 2009
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Handle: RePEc:cpr:ceprdp:7489

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Related research

Keywords: consumption inequality; income inequality; wage inequality;

Other versions of this item:

Find related papers by JEL classification:

• D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
• D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
• E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
• J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

This paper has been announced in the following NEP Reports:

• NEP-ALL-2009-11-27 (All new papers)
• NEP-LAB-2009-11-27 (Labour Economics)

References

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:

1. ¿Vale la pena estudiar? (VI) La inusual caída de la ganancia salarial resultante de la educación avanzada
   by Luis Garicano in Nada Es Gratis on 2010-12-08 23:30:40
2. Desigualdad, educación y construcción
   by Cives in Politikon on 2012-04-26 14:49:41

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

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Cited by:

1. Bonhomme, Stephane & Hospido, Laura, 2012. "The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data," IZA Discussion Papers 6669, Institute for the Study of Labor (IZA).
   
   • Stéphane Bonhomme & Laura Hospido, 2012. "The Cycle Of Earnings Inequality: Evidence From Spanish Social Security Data," Working Papers wp2012_1209, CEMFI.
   • Stéphane Bonhomme & Laura Hospido, 2012. "The cycle of earnings inequality: evidence from spanish social security data," Banco de España Working Papers 1225, Banco de España.
2. Raquel Carrasco & Juan F. Jimeno & A. Carolina Ortega, 2011. "Accounting for changes in the Spanish wage distribution: the role of employment Composition effects," Banco de España Working Papers 1120, Banco de España.
3. Biavaschi, Costanza & Eichhorst, Werner & Giulietti, Corrado & Kendzia, Michael J. & Muravyev, Alexander & Pieters, Janneke & Rodríguez-Planas, Núria & Schmidl, Ricarda & Zimmermann, Klaus F., 2012. "Youth Unemployment and Vocational Training," IZA Discussion Papers 6890, Institute for the Study of Labor (IZA).
4. Aitor Lacuesta & Sergio Puente & Pilar Cuadrado, 2009. "Omitted variables in the measure of a labour quality index: the case of Spain," Banco de España Working Papers 0835, Banco de España.
5. Pijoan-Mas, Josep & Sánchez-Marcos, Virginia, 2009. "Spain is Different: Falling Trends of Inequality," CEPR Discussion Papers 7489, C.E.P.R. Discussion Papers.
   
   • Josep Pijoan-Mas & Virginia Sanchez-Marcos, 2010. "Spain is Different: Falling Trends of Inequality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 154-178, January.
   • Josep Pijoan-Mas & Virginia Sánchez-Marcos, 2009. "Spain Is Different: Falling Trends Of Inequeality," Working Papers wp2009_0910, CEMFI.
6. Romain Ranciere & Nathaniel A. Throckmorton & Michael Kumhof & Claire Lebarz & Alexander W. Richter, 2012. "Income Inequality and Current Account Imbalances," IMF Working Papers 12/8, International Monetary Fund.
7. Raquel Carrasco & Juan F. Jimeno & A. Carolina Ortega, 2012. "Declining returns to skill and the distribution of wages : Spain 1995-2006," Economics Working Papers we1231, Universidad Carlos III, Departamento de Economía.
8. Virginia Maestri & Andrea Roventini, 2012. "Inequality and Macroeconomic Factors: A Time-Series Analysis for a Set of OECD Countries," LEM Papers Series 2012/21, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
   
   • Virginia Maestri & Andrea Roventini, 2012. "Inequality and Macroeconomic Factors: A Time-Series Analysis for a Set of OECD Countries," Working Papers 34/2012, University of Verona, Department of Economics.
9. Aitor Lacuesta & Sergio Puente & Ernesto Villanueva, 2011. "The schooling response to a sustained increase in low-skill wages: evidence from spain 1989-2009," Banco de España Working Papers 1208, Banco de España.
10. Virginia Maestri & Roventini, A. (Andrea), 2012. "GINI DP 30: Stylized Facts on Business Cycles and Inequality," GINI Discussion Papers 30, AIAS, Amsterdam Institute for Advanced Labour Studies.
11. Nao Sudo & Michio Suzuki & Tomoaki Yamadai, 2012. "Inequalities in Japanese Economy during the Lost Decades," CARF F-Series CARF-F-284, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
    
    • Nao Sudo & Michio Suzuki & Tomoaki Yamada, 2012. "Inequalities in Japanese Economy during the Lost Decades," CIRJE F-Series CIRJE-F-856, CIRJE, Faculty of Economics, University of Tokyo.
12. Manuel Hidalgo, 2009. "Are Within-Groups `Abilities' Distribution Constant on Time?," Working Papers 09.15, Universidad Pablo de Olavide, Department of Economics.

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