The evolution of individual male earnings in Great Britain 1974-1994
AbstractIn this paper I study the changing dynamic structure of male wages in Great Britain using the New Earnings Survey Panel form 1974-1994. Computing the covariance structure of individual wages by cohort I find evidence of a substantial permanent component of earnings that increases over the life cycle and a highly persistent, serially correlated transitory component. In addition, the estimated variances of both the permanent and transitory components have risen over this period, each explaining about half the rise in inequality. These results imply that the observed cross sectional rise in inequality is reflective of largely permanent differences between individuals that have grown over the last decade or so.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 20647.
Length: 55 pages
Date of creation: Nov 1996
Date of revision:
Find related papers by JEL classification:
- R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
- J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
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