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Are changes in the dispersion of hours worked a cause of increased earnings inequality?

Author

Listed:
  • Daniele Checchi

    (University of Milan
    Irvapp-FBK
    IZA)

  • Cecilia García-Peñalosa

    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS
    CESifo)

  • Lara Vivian

    (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)

Abstract

Earnings are the product of wages and hours of work; hence, the dispersion of hours can magnify or dampen a given distribution of wages. This paper examines how earnings inequality is affected by the dispersion of working hours using data for the USA, the UK, Germany, and France over the period 1989–2012. We find that hours dispersion can account for over a third of earnings inequality in some countries and that its contribution has been growing over time. We interpret the expansion in hours inequality in European countries as being the result of weaker union power that led to less successful bargaining concerning working hours.

Suggested Citation

  • Daniele Checchi & Cecilia García-Peñalosa & Lara Vivian, 2016. "Are changes in the dispersion of hours worked a cause of increased earnings inequality?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-34, December.
  • Handle: RePEc:spr:izaels:v:5:y:2016:i:1:d:10.1186_s40174-016-0065-2
    DOI: 10.1186/s40174-016-0065-2
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    Cited by:

    1. Daniele Checchi & Cecilia Garcia-Peñalosa & Lara Vivian, 2022. "Hours Inequality," Working Papers hal-03872764, HAL.
    2. Domenico Depalo & Salvatore Lattanzio, 2023. "The increase in earnings inequality and volatility in Italy: the role and persistence of atypical contracts," Questioni di Economia e Finanza (Occasional Papers) 801, Bank of Italy, Economic Research and International Relations Area.
    3. Abbritti, Mirko & Consolo, Agostino, 2022. "Labour market skills, endogenous productivity and business cycles," Working Paper Series 2651, European Central Bank.
    4. Hajime Takatsuka & Dao‐Zhi Zeng, 2018. "Elastic labor supply, variable markups, and spatial inequalities," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1084-1100, November.
    5. Peter Benczur & Zsombor Cseres-Gergely & Peter Harasztosi, 2017. "EU-wide income inequality in the era of the Great Recession," Budapest Working Papers on the Labour Market 1713, Institute of Economics, Centre for Economic and Regional Studies.
    6. Yurdagul, Emircan & Shao, Lin & Sohail, Faisal, 2022. "Labor Supply and Firm Size," CEPR Discussion Papers 17469, C.E.P.R. Discussion Papers.
    7. Behringer, Jan & Gonzalez Granda, Martin & van Treeck, Till, 2022. "Varieties of the rat race: Working hours in the age of abundance," ifso working paper series 17, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    8. Hammar, Olle & Waldenström, Daniel, 2017. "Global Earnings Inequality, 1970–2015," Working Paper Series 1166, Research Institute of Industrial Economics.
    9. Biewen Martin & Plötze Daniela, 2019. "The Role of Hours Changes for the Increase in German Earnings Inequality," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(2), pages 1-28, April.
    10. Fernández-Val, Iván & Peracchi, Franco & van Vuuren, Aico & Vella, Francis, 2020. "Hours Worked and the U.S. Distribution of Real Annual Earnings 1976–2016," IZA Discussion Papers 13016, Institute of Labor Economics (IZA).
    11. Iv'an Fern'andez-Val & Franco Peracchi & Aico van Vuuren & Francis Vella, 2020. "Hours Worked and the U.S. Distribution of Real Annual Earnings 1976-2019," Papers 2002.11211, arXiv.org, revised Nov 2021.
    12. Biewen Martin & Plötze Daniela, 2019. "The Role of Hours Changes for the Increase in German Earnings Inequality," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(2), pages 277-304, April.
    13. Joanna Tyrowicz & Magdalena Smyk, 2019. "Wage Inequality and Structural Change," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(2), pages 503-538, January.
    14. Koray Aktas, 2021. "Characterizing Life-Cycle Dynamics of Annual Days of Work, Wages, and Cross-Covariances," Working Papers 465, University of Milano-Bicocca, Department of Economics.
    15. Beckmannshagen, Mattis & Schröder, Carsten, 2022. "Earnings inequality and working hours mismatch," Labour Economics, Elsevier, vol. 76(C).
    16. Checchi, Daniele & Garca-Peñalosa, Cecilia & Vivian, Lara, 2022. "Hours Inequality," IZA Discussion Papers 15759, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Earnings inequality; Working hours; Inequality index decomposition;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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