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The distribution of employees’ labour earnings in the European Union: Data, concepts and first results

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Author Info

  • Andrea Brandolini

    ()
    (Bank of Italy, Department for Structural Economic Analysis)

  • Alfonso Rosolia

    (Bank of Italy, Department for Structural Economic Analysis)

  • Roberto Torrini

    (Bank of Italy, Department for Structural Economic Analysis)

Abstract

This paper studies the distribution of labour earnings among employees within the EU using data from Wave 2007-1 of the Community Statistics on Income and Living Conditions (EUSILC). The review of available information and the comparisons with external sources show that the EU-SILC data are not exempt from problems, particularly in some countries, yet can be fruitfully used to study the distribution of earnings in the EU; they also allow researchers to assess the sensitivity of results to various concepts of labour earnings. The ranking of countries by median full-time equivalent monthly gross earnings shows Eastern European nations at the bottom and Luxembourg at the top; earnings differences are sizeable, both across and within countries. Taking the euro area and the EU-25 (excluding Malta, for which data are unavailable) as a whole, inequality is higher when earnings are measured in euro at market rates rather than at purchasing power parities. The wage distribution is wider in the EU-25 than in the euro area, which is not surprising given that the former includes the poorer Eastern European countries that joined the Union in 2004. The higher inequality observed in the EU-25 is largely attributable to differences between countries, which are essentially due to the returns to individual attributes rather than to a different composition of the workforce with respect to these attributes.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2011-198.pdf
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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 198.

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Length: 26 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2011-198

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Keywords: wage inequality; EU and euro area labour markets.;

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References

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  1. Enrico Moretti, 2008. "Real Wage Inequality," Working Paper Series 34-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
  2. Andrea Brandolini, 2007. "Measurement of income distribution in supranational entities: the case of the European Union," Temi di discussione (Economic working papers) 623, Bank of Italy, Economic Research and International Relations Area.
  3. Simon, Hipolito, 2005. "Employer wage differentials from an international perspective," Economics Letters, Elsevier, vol. 88(2), pages 284-288, August.
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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, vol. 23(3), pages 271-310.
  2. Brian Nolan & Ive Marx & Wiemer Salverda, 2011. "GINI DP 9: Comparable Indicators of Inequality Across Countries," GINI Discussion Papers 9, AIAS, Amsterdam Institute for Advanced Labour Studies.

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