Inequality for wage earners and self-employed : evidence from panel data
In this paper we study the evolution of income inequality for employees and self-employed workers. We highlight the importance of separately analyzing these different sources of income to gain a broader understanding of inequality. Using Spanish panel data on income and consumption from the ECPF for the period 1987-96, we decompose income shocks into a permanent and a transitory component. We find that there are noticeable differences in the evolution of income inequality, as well as in the relative importance of the permanent and transitory components across these groups. Our results point that the evolution of inequality can be basically explained by movements in the transitory component of income for the self-employed, while for the employees it is mainly driven by the permanent component, specially at the end of the period. Given these disparities, it seems that these two sources of income should be studied separately and that different policies are suitable for each group.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Primiceri, Giorgio E & van Rens, Thijs, 2006.
"Heterogenous Life-Cycle Profiles, Income Risk and Consumption Inequality,"
CEPR Discussion Papers
5881, C.E.P.R. Discussion Papers.
- Primiceri, Giorgio E. & van Rens, Thijs, 2009. "Heterogeneous life-cycle profiles, income risk and consumption inequality," Journal of Monetary Economics, Elsevier, vol. 56(1), pages 20-39, January.
- Primiceri, Giorgio E. & van Rens, Thijs, 2007. "Heterogeneous Life-Cycle Profiles, Income Risk and Consumption Inequality," IZA Discussion Papers 3239, Institute for the Study of Labor (IZA).
- Giorgio E. Primiceri & Thijs van Rens, 2006. "Heterogeneous life-cycle profiles, income risk and consumption inequality," Economics Working Papers 945, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 2008.
- Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 445-67, June.
- Carrington, William J & McCue, Kristin & Pierce, Brooks, 1996. "The Role of Employer-Employee Interactions in Labor Market Cycles: Evidence from the Self-Employed," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 571-602, October.
- Martin Browning & Annamaria Lusardi, 1996.
"Household Saving: Micro Theories and Micro Facts,"
96-01, University of Copenhagen. Department of Economics.
- Fatih Guvenen, 2007.
"An Empirical Investigation of Labor Income Processes,"
NBER Working Papers
13394, National Bureau of Economic Research, Inc.
- Fatih Guvenen, 2009. "An Empirical Investigation of Labor Income Processes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 58-79, January.
- Fatih Guvenen, 2005. "An Empirical Investigation of Labor Income Processes," Macroeconomics 0508026, EconWPA.
- Fatih Guvenen, 2007. "An empirical investigation of labor income processes," IFS Working Papers W07/13, Institute for Fiscal Studies.
- Richard Blundell & Ian Preston, 1998.
"Consumption Inequality and Income Uncertainty,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 113(2), pages 603-640.
- Richard Blundell & Luigi Pistaferri & Ian Preston, 2004.
"Consumption inequality and partial insurance,"
IFS Working Papers
W04/28, Institute for Fiscal Studies.
- Javier Alvarez, 2004. "Dynamics and Seasonality in Quarterly Panel Data: An Analysis of Earnings Mobility in Spain," Journal of Business & Economic Statistics, American Statistical Association, vol. 22, pages 443-456, October.
- Simon C. Parker & Yacine Belghitar & Tim Barmby, 2005.
"Wage Uncertainty and the Labour Supply of Self-Employed Workers,"
Royal Economic Society, vol. 115(502), pages C190-C207, 03.
- Simon Parker & Tim Barmby & Yacine Belghitar, 2004. "Wage Uncertainty And The Labour Supply Of Self-Employed Workers," Royal Economic Society Annual Conference 2004 67, Royal Economic Society.
- Jean-Marc Falter, 2007. "Self-employment and earning inequality," Journal of Income Distribution, Journal of Income Distribution, vol. 16(2), pages 106-127, June.
- Robert A. Moffitt & Peter Gottschalk, 1995. "Trends in the Variances of Permanent and Transitory Earnings in the U.S. and Their Relation to Earnings Mobility," Boston College Working Papers in Economics 444, Boston College Department of Economics, revised 01 Nov 1998.
- Martinez-Granado, Maite, 2002. "Self-Employment and Labour Market Transitions: A Multiple State Model," CEPR Discussion Papers 3661, C.E.P.R. Discussion Papers.
- Albarran, P., 2000. "Income Uncertainty and Precautionary Saving: Evidence from Household Rotating Panel Data," Papers 0008, Centro de Estudios Monetarios Y Financieros-.
- Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
- Robert A. Moffitt & Peter Gottschalk, 2002. "Trends in the Transitory Variance of Earnings in the United States," Economic Journal, Royal Economic Society, vol. 112(478), pages C68-C73, March.
- McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, vol. 8(2), pages 191-210, October.
When requesting a correction, please mention this item's handle: RePEc:cte:werepe:we072414. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ana Poveda)
If references are entirely missing, you can add them using this form.