Earnings Inequality in Germany
AbstractRecent studies have documented the growth of earnings inequality in the United States during the 1980s. In contrast to these studies' findings, our analysis of micro data for the former West Germany yields virtually no evidence of growth in earnings inequality over the same period. Between 1978 and 1988, a reduction in the dispersion of earnings among workers in the bottom half of the earnings distribution led to a narrowing of the overall dispersion of earnings in Germany. Earnings differentials across education and age groups remained roughly stable, and there was no general widening of earnings differentials within either education or age groups. Germany wage setting institutions tend to limit earnings differentials across groups of workers, but differences in wage setting institutions cannot fully explain the differences between trends in earnings inequality in Germany and those in the United States. Both the high quality of the training received by non- college-bound German youth and the fact that the growth of the highly- educated work force did not decelerate in Germany as it did in the United States seem likely to have contributed to these differences.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4541.
Date of creation: Nov 1993
Date of revision:
Publication status: published as Differences and Changes in Wage Structure, Lawrence Katz and Richard Freeman, eds. (Chicago: University of Chicago Press: 1995).
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Other versions of this item:
- Katharine G. Abraham & Susan Houseman, 1995. "Earnings Inequality in Germany," NBER Chapters, in: Differences and Changes in Wage Structures, pages 371-404 National Bureau of Economic Research, Inc.
- Susan N. Houseman & Katharine G. Abraham, 1995. "Earnings Inequality in Germany," Book chapters authored by Upjohn Institute researchers, in: Richard B. Freeman & Lawrence F. Katz (ed.), Differences and Changes in Wage Structures, pages 371-403 W.E. Upjohn Institute for Employment Research.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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