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The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data

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  • Bonhomme, Stephane

    ()
    (CEMFI, Madrid)

  • Hospido, Laura

    ()
    (Bank of Spain)

Abstract

We use detailed information on labor earnings and employment from social security records to document the evolution of earnings inequality in Spain from 1988 to 2010. Male earnings inequality was strongly countercyclical: it increased around the 1993 recession, showed a substantial decrease during the 1997-2007 expansion, and then a sharp increase during the recent recession. This evolution was partly driven by the cyclicality of employment and earnings in the lower-middle part of the distribution. We emphasize the importance of the housing boom and subsequent housing bust, and show that demand shocks in the construction sector had large effects on aggregate labor market outcomes.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6669.

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Length: 64 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6669

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Keywords: earnings inequality; social security data; unemployment; business cycle;

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References

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  1. Fatih Guvenen & Serdar Ozkan & Jae Song, 2012. "The Nature of Countercyclical Income Risk," NBER Working Papers 18035, National Bureau of Economic Research, Inc.
  2. Blundell, Richard William & Gosling, Amanda & Ichimura, Hidehiko & Meghir, Costas, 2004. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4705, C.E.P.R. Discussion Papers.
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  6. Libertad González Luna & Francesc Ortega, 2009. "Immigration and housing booms: Evidence from Spain," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 1167, Department of Economics and Business, Universitat Pompeu Fabra.
  7. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," NBER Working Papers 11628, National Bureau of Economic Research, Inc.
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  10. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2010. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States: 1967-2006," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 15-51, January.
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  14. Alvaredo, Facundo & Saez, Emmanuel, 2009. "Income and Wealth Concentration in Spain from a Historical and Fiscal Perspective," Institute for Research on Labor and Employment, Working Paper Series, Institute of Industrial Relations, UC Berkeley qt4017h9q3, Institute of Industrial Relations, UC Berkeley.
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Cited by:
  1. Jesus Fernandez-Villaverde & Luis Garicano & Tano Santos, 2013. "Political Credit Cycles: The Case of the Euro Zone," NBER Working Papers 18899, National Bureau of Economic Research, Inc.
  2. Gonzalo Paz Pardo & José Manuel Sánchez Santos, 2014. "Household Debt and Consumption Inequality: The Spanish Case," Economies, MDPI, Open Access Journal, MDPI, Open Access Journal, vol. 2(3), pages 147-170, July.
  3. Augusto de la Torre & Samuel Pienknagura & Eduardo Levy Yeyati, . "Latin America and the Caribbean as Tailwinds Recede : In Search of Higher Growth, LAC Semiannual Report, April 2013," World Bank Other Operational Studies 13266, The World Bank.
  4. Raquel Carrasco & J. Ignacio García Pérez, 2012. "Economic Conditions and Employment Dynamics of Immigrants versus Natives: Who Pays the Costs of the “Great Recession”?," Working Papers, Universidad Pablo de Olavide, Department of Economics 12.13, Universidad Pablo de Olavide, Department of Economics.

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