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The cycle of earnings inequality: evidence from Spanish social security data

  • Stéphane Bonhomme


  • Laura Hospido


    (Banco de España)

We use detailed information on labor earnings and employment from Social Security records to document earnings inequality in Spain from 1988 to 2010. Male earnings inequality was strongly countercyclical: it increased around the 1993 recession, showed a substantial decrease during the 1997-2007 expansion and then a sharp increase during the recent recession. These developments were partly driven by the cyclicality of employment and earnings in the lower-middle part of the distribution. We emphasize the importance of the housing boom and subsequent housing bust, and show that demand shocks in the construction sector significantly impacted aggregate labor market outcomes

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Paper provided by Banco de España & Working Papers Homepage in its series Working Papers with number 1225.

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Length: 70 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:bde:wpaper:1225
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  1. 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.
  2. Facundo Alvaredo & Emmanuel Saez, 2009. "Income and wealth concentration in Spain from a historical and fiscal perspective," Post-Print hal-00812853, HAL.
  3. Blundell, Richard William & Gosling, Amanda & Ichimura, Hidehiko & Meghir, Costas, 2004. "Changes in the Distribution of Male and Female Wages Accounting for Employment Composition Using Bounds," CEPR Discussion Papers 4705, C.E.P.R. Discussion Papers.
  4. Jonathan Heathcote & Fabrizio Perri & Giovanni L. Violante, 2009. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States, 1967-2006," NBER Working Papers 15483, National Bureau of Economic Research, Inc.
  5. Gadi Barlevy & Daniel Tsiddon, 2004. "Earnings Inequality and the Business Cycle," NBER Working Papers 10469, National Bureau of Economic Research, Inc.
  6. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," Harvard Institute of Economic Research Working Papers 2096, Harvard - Institute of Economic Research.
  7. Libertad Gonzalez & Francesc Ortega, 2009. "Immigration and Housing Booms: Evidence from Spain," CReAM Discussion Paper Series 0919, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Michele Boldrin & Sergi Jimenez-Martin & Franco Peracchi, 1999. "Social Security and Retirement in Spain," NBER Chapters, in: Social Security and Retirement around the World, pages 305-353 National Bureau of Economic Research, Inc.
  9. Guell, Maia & Petrongolo, Barbara, 2007. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Labour Economics, Elsevier, vol. 14(2), pages 153-183, April.
  10. Manuel A. Hidalgo, 2008. "Wage Inequality in Spain, 1980-2000," Working Papers 08.08, Universidad Pablo de Olavide, Department of Economics.
  11. Fatih Guvenen & Serdar Ozkan & Jae Song, 2012. "The Nature of Countercyclical Income Risk," NBER Working Papers 18035, National Bureau of Economic Research, Inc.
  12. Raquel Carrasco & Juan F. Jimeno & A. Carolina Ortega, 2011. "Accounting for changes in the Spanish wage distribution: the role of employment Composition effects," Working Papers 1120, Banco de España;Working Papers Homepage.
  13. Stucchi, Rodolfo & Ortigueira, Salvador & Dolado, Juan José, 2011. "Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms," UC3M Working papers. Economics we1137, Universidad Carlos III de Madrid. Departamento de Economía.
  14. Dolado, Juan J. & Garcia-Serrano, Carlos & Jimeno, Juan F, 2001. "Drawing Lessons From the Boom of Temporary Jobs in Spain," CEPR Discussion Papers 2884, C.E.P.R. Discussion Papers.
  15. Aitor Lacuesta & Sergio Puente & Ernesto Villanueva, 2011. "The schooling response to a sustained increase in low-skill wages: evidence from Spain 1989-2009," Working Papers 1208, Banco de España;Working Papers Homepage.
  16. Ainhoa Aparicio, 2010. "High-School Dropouts and Transitory Labor Market Shocks: The Case of the Spanish Housing Boom," Carlo Alberto Notebooks 158, Collegio Carlo Alberto.
  17. Florentino Felgueroso & Manuel Hidalgo & SergiJiménez Martín, 2010. "Explaining the fall of the skill wage premium in Spain," Working Papers 2010-19, FEDEA.
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