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Inequality for Wage Earners and Self‐Employed: Evidence from Panel Data

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  • Pedro Albarran
  • Raquel Carrasco
  • Maite Martinez‐Granado

Abstract

In this paper we highlight the importance of analysing the evolution of income inequality separately for employees and self‐employed workers. Using Spanish panel data on income and consumption for the period 1987–96, we find noticeable differences across these groups in the evolution of income inequality, and in the relative importance of the transitory and permanent components of income variance. The evolution of inequality is mainly explained by movements in the transitory component for the self‐employed and by the permanent component for the employees. Our results suggest that different policies should be implemented for each group.

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  • Pedro Albarran & Raquel Carrasco & Maite Martinez‐Granado, 2009. "Inequality for Wage Earners and Self‐Employed: Evidence from Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(4), pages 491-518, August.
    • Handle: RePEc:bla:obuest:v:71:y:2009:i:4:p:491-518
    DOI: 10.1111/j.1468-0084.2009.00549.x
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    Cited by:

    1. Molina, Jose Alberto & Velilla, Jorge & Ortega, Raquel, 2015. "The decision to become an entrepreneur in Spain: The role of the household financial situation," MPRA Paper 68101, University Library of Munich, Germany.
    2. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    3. Josep Pijoan-Mas & Virginia Sanchez-Marcos, 2010. "Spain is Different: Falling Trends of Inequality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 154-178, January.
    4. Iacono Roberto & Palagi Elisa, 2022. "Still the Lands of Equality? Heterogeneity of Income Composition in the Nordics, 1975–2016," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 22(2), pages 221-268, April.
    5. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    6. Aristei, David & Perugini, Cristiano, 2015. "The drivers of income mobility in Europe," Economic Systems, Elsevier, vol. 39(2), pages 197-224.
    7. Jens Holscher & Cristiano Perugini & Fabrizio Pompei, 2011. "Wage inequality, labour market flexibility and duality in Eastern and Western Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 23(3), pages 271-310.
    8. Belloc, Ignacio & Molina, José Alberto & Velilla, Jorge, 2022. "Living in Rural Areas and Self-Employment," IZA Discussion Papers 15059, Institute of Labor Economics (IZA).
    9. Eisenhauer, Philipp & Pfeiffer, Friedhelm, 2008. "Assessing intergenerational earnings persistence among German workers," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 119-137.
    10. Christopher D. Carroll & Jiri Slacalek & Kiichi Tokuoka, 2014. "The Distribution of Wealth and the MPC: Implications of New European Data," American Economic Review, American Economic Association, vol. 104(5), pages 107-111, May.
    11. Ada Ferrer-i-carbonell & X. Ramos & M. Oviedo, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Spain," GINI Country Reports spain, AIAS, Amsterdam Institute for Advanced Labour Studies.
    12. Belloc, Ignacio, 2022. "Emprendimiento en entornos rurales: Evidencia con la Encuesta Europea sobre Condiciones Laborales [Entrepreneurship in rural settings: Evidence from the European Working Conditions Survey]," MPRA Paper 111591, University Library of Munich, Germany.
    13. Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.
    14. Alfonso R. Sánchez Martín, 2019. "Capacidad económica y pautas de cotización y formación de pensiones de los trabajadores autónomos en España: evidencia empírica en el intervalo 2008/2017," Studies on the Spanish Economy eee2019-27, FEDEA.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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