Permanent versus transitory wage differentials and the inequality-hours hypothesis
This paper disentangles the effect of inequality in permanent and transitory wages on hours worked by, first, estimating the two components for Swedish industries and, second, using the resulting estimates as explanatory variables in an hours-worked equation. Consistent with Bell and Freeman’s (2001) inequality-hours hypothesis, permanent wage differentials are found to have a positive effect on individuals’ hours of work while transitory wage differentials have no effect. However, the analysis also shows that, in estimated hours-worked equations, inequality in observed wages is potentially a good approximation for inequality in permanent wages.
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- Bell, Linda A. & Freeman, Richard B., 2001.
"The incentive for working hard: explaining hours worked differences in the US and Germany,"
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- Linda A. Bell & Richard B. Freeman, 2000. "The Incentive for Working Hard: Explaining Hours Worked Differences in the U.S. and Germany," NBER Working Papers 8051, National Bureau of Economic Research, Inc.
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- Dahlberg, Matz & Gustavsson, Magnus, 2005. "Inequality and Crime: Separating the Effects of Permanent and Transitory Income," Working Paper Series 2005:20, Uppsala University, Department of Economics.
- Dahlberg, Matz & Gustavsson, Magnus, 2005. "Inequality and crime: separating the effects of permanent and transitory income," Working Paper Series 2005:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- David Campbell & Francis Green, 2002. "The Long Term Pay-Off From Working Longer Hours," Studies in Economics 0205, School of Economics, University of Kent.
- Anger, Silke, 2008. "Overtime Work as a Signaling Device," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 167-189.
- Silke Anger, 2008. "Overtime Work As A Signaling Device," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(2), pages 167-189, 05.
- Meghir, Costas & Pistaferri, Luigi, 2011. "Earnings, Consumption and Life Cycle Choices," Handbook of Labor Economics, Elsevier.
- Costas Meghir & Luigi Pistaferri, 2010. "Earnings, consumption and lifecycle choices," IFS Working Papers W10/05, Institute for Fiscal Studies.
- Costas Meghir & Luigi Pistaferri, 2010. "Earnings, Consumption and Lifecycle Choices," NBER Working Papers 15914, National Bureau of Economic Research, Inc.
- Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, September.
- Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
- George J. Borjas, 1980. "The Relationship between Wages and Weekly Hours of Work: The Role of Division Bias," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 409-423.
- Peter Fredriksson & Robert H. Topel, 2010. "Wage Determination and Employment in Sweden Since the Early 1990s: Wage Formation in a New Setting," NBER Chapters,in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 83-126 National Bureau of Economic Research, Inc.
- Stuart S. Rosenthal & William C. Strange, 2008. "Agglomeration and Hours Worked," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 105-118, February.
- Peter Kuhn & Fernando Lozano, 2008. "The Expanding Workweek? Understanding Trends in Long Work Hours among U.S. Men, 1979-2006," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 311-343, 04. Full references (including those not matched with items on IDEAS)
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