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International Differences in Wage Inequality: A New Glance with European Matched Employer-Employee Data

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  • Hipolito, Simon

Abstract

Using unique international harmonized matched employer-employee microdata from the European Structure of Earnings Survey for nine representative European countries, this comparative study examines the origin of international differences in wage inequality. Our novel evidence uncovers that global wage inequality is highly correlated with the magnitude of inter-firm wage differentials and that workplace- and job-related factors generally have a more significant impact on within-country wage inequality than individual characteristics. On the whole, European countries exhibit considerably different wage structures: they differ significantly not only in the extent of wage inequality but also in the relative influence of factors shaping wage inequality. Comparative analyses reveal that although cross-country differences in labour force composition play a part in the explanation, differences in distribution and, very specially, in labour market prices of workplace and job characteristics are primary reasons contributing to international differences in wage inequality.

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  • Hipolito, Simon, 2008. "International Differences in Wage Inequality: A New Glance with European Matched Employer-Employee Data," MPRA Paper 7932, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:7932
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    3. Fabián Slonimczyk, 2013. "Earnings inequality and skill mismatch in the U.S.: 1973–2002," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(2), pages 163-194, June.
    4. Andrea Brandolini & Alfonso Rosolia & Roberto Torrini, 2011. "The distribution of employees’ labour earnings in the European Union: Data, concepts and first results," Working Papers 198, ECINEQ, Society for the Study of Economic Inequality.
    5. Carl E. Walsh & Federico Ravenna, 2010. "Business Cycles and Labor Market Flows with Sequential Screening," 2010 Meeting Papers 571, Society for Economic Dynamics.

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    More about this item

    Keywords

    Wage inequality; matched employer-employee data;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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