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Rising Wage Inequality in Germany: Increasing Heterogeneity and Changing Selection into Full-Time Work

Author

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  • Biewen, Martin

    (University of Tuebingen)

  • Fitzenberger, Bernd

    (Institute for Employment Research (IAB), Nuremberg)

  • de Lazzer, Jakob

    (Humboldt University Berlin)

Abstract

This study revisits the increase in wage inequality in Germany. Accounting for changes in various sets of observables, composition changes explain a large part of the increase in wage inequality among full-time workers. The composition effects are larger for females than for males, and increasingly heterogenous labor market histories play an important role. Furthermore, we find strong effects of education for males and strong effects of age and experience for females. Changes in industry and occupation explain fairly little. Extending the analysis to total employment confirms the basic findings, while revealing substantial negative selection into part-time work.

Suggested Citation

  • Biewen, Martin & Fitzenberger, Bernd & de Lazzer, Jakob, 2017. "Rising Wage Inequality in Germany: Increasing Heterogeneity and Changing Selection into Full-Time Work," IZA Discussion Papers 11072, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11072
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    Cited by:

    1. Carrillo-Tudela, Carlos & Launov, Andrey & Robin, Jean-Marc, 2021. "The fall in german unemployment: A flow analysis," European Economic Review, Elsevier, vol. 132(C).
    2. Dirk Antonczyk & Thomas DeLeire & Bernd Fitzenberger, 2018. "Polarization and Rising Wage Inequality: Comparing the U.S. and Germany," Econometrics, MDPI, vol. 6(2), pages 1-33, April.
    3. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational tasks and wage inequality in West Germany: A decomposition analysis," Labour Economics, Elsevier, vol. 79(C).
    4. Mönnig Anke & Maier Tobias & Zika Gerd, 2019. "Economy 4.0 – Digitalisation and Its Effect on Wage Inequality," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 363-398, June.
    5. Sasiwimon Warunsiri Paweenawat & Lusi Liao, 2022. "Brain over Brawn: Job Polarization, Structural Change, and Skill Prices," PIER Discussion Papers 189, Puey Ungphakorn Institute for Economic Research.

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    More about this item

    Keywords

    wage inequality; reweighting; composition effects; Germany;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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