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

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Hipolito , Simon

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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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File URL: http://mpra.ub.uni-muenchen.de/7932/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7932.

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Date of creation: 2008
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Handle: RePEc:pra:mprapa:7932

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Related research
Keywords: Wage inequality; matched employer-employee data.;

Find related papers by 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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    Other versions:
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  3. Daniel S. Hamermesh, 2007. "Fun with Matched Firm-Employee Data: Progress and Road Maps," IZA Discussion Papers 2580, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Simon, Hipolito, 2005. "Employer wage differentials from an international perspective," Economics Letters, Elsevier, vol. 88(2), pages 284-288, August. [Downloadable!] (restricted)
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  10. Kimberly Bayard & Judith Hellerstein & David Neumark & Kenneth Troske, 1999. "New Evidence on Sex Segregation and Sex Differences in Wages from Matched Employee-Employer Data," NBER Working Papers 7003, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Edwin Leuven & Hessel Oosterbeek & Hans van Ophem, 2004. "Explaining international differences in male skill wage differentials by differences in demand and supply of skill," Economic Journal, Royal Economic Society, vol. 114(495), pages 466-486, 04. [Downloadable!] (restricted)
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  19. Catalina Amuedo-Dorantes & Sara De la Rica, 2006. "The Role of Segregation and Pay Structure on the Gender Wage Gap: Evidence from Matched Employer-Employee Data for Spain," The B.E. Journal of Economic Analysis & Policy, Berkeley Electronic Press, vol. 0(1). [Downloadable!]
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