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Wages in the Netherlands: a Micro Approach

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  • Stefan Groot

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    Abstract

    Many OECD countries have experienced growing wage inequality since the 1980s. This trend is generally explained by increasing relative demand for skilled labor due to skill biased technological progress and, to some extent, globalization. By using micro data from Statistics Netherlands, this paper examines trends in Dutch (real pre-tax) wage inequality between 2000 and 2005, thus extending the previous literature by covering recent years. We find that inequality, after correcting for observed worker characteristics, decreased somewhat at the lower half of the wage distribution, while increasing slightly at most of the upper half, and relatively strong at the highest few percentiles. Wage growth was also higher for occupation categories with a higher initial wage level, and for workers in the Randstad agglomerations. It is shown that changes in the wage structure are to a large extent explained by prices and quantities of worker characteristics, while changes in the residual wage distribution play a role at the highest percentiles.

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1526.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa10p1526

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    1. Richard Nahuis & Henri de Groot, 2003. "Rising skill premia; you ain't seen nothing yet?," CPB Discussion Paper 20, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Euwals, Rob & Knoef, Marike & van Vuuren, Daniel, 2007. "The Trend in Female Labour Force Participation: What Can Be Expected for the Future?," IZA Discussion Papers 3225, Institute for the Study of Labor (IZA).
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," NBER Working Papers 5956, National Bureau of Economic Research, Inc.
    5. Robert Z. Lawrence, 2008. "Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality?," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa85, November.
    6. Maarten Goos & Alan Manning, 2003. "Lousy and lovely jobs: the rising polarization of work in Britain," LSE Research Online Documents on Economics 20002, London School of Economics and Political Science, LSE Library.
    7. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
    8. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
    9. Fishlow, Albert, 1972. "Brazilian Size Distribution of Income," American Economic Review, American Economic Association, vol. 62(2), pages 391-402, May.
    10. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
    11. Anthony B. Atkinson & Wiemer Salverda, 2005. "Top Incomes In The Netherlands And The United Kingdom Over The 20th Century," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 883-913, 06.
    12. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
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