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Wage inequality and structural change

Listed author(s):
  • Joanna Tyrowicz

    ()

    (Group for Research in Applied Economics (GRAPE)
    University of Warsaw)

  • Magdalena Smyk

    ()

    (Group for Research in Applied Economics (GRAPE))

Income inequality in the context of large structural change has received a lot of attention in the literature, but most studies relied on household post-transfer inequality measures. This study utilizes a novel and fairly comprehensive collection of micro datasets between 1980s and 2010 for both advanced market economies and economies undergoing transition from central planning to market based system. We show that earned income inequality was initially lower in transition economies and immediately upon the change of the economic system surpassed the levels observed in advanced economies. We decompose changes in wage inequality into parts that can be attributed to changes in characteristics (mainly education) and changes in rewards, but did not find any leading factor. Finally, in the context of skill-biased technological change literature we find a very weak link between structural changes and wages in both advanced and post-transition economies. %This holds regardless of whether an economy has underwent a large structural shock or not.

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File URL: http://grape.org.pl/WP/8_SmykTyrowicz_website.pdf
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Paper provided by GRAPE Group for Research in Applied Economics in its series GRAPE Working Papers with number 8.

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Length: 31 pages
Date of creation: 2017
Handle: RePEc:fme:wpaper:8
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  1. Francis Green & Yu Zhu, 2010. "Overqualification, job dissatisfaction, and increasing dispersion in the returns to graduate education," Oxford Economic Papers, Oxford University Press, vol. 62(4), pages 740-763, October.
  2. Danièle Meulders & François Rycx & Robert Plasman, 2004. "Minimum Wages, low pay and unemployment: introduction," ULB Institutional Repository 2013/7704, ULB -- Universite Libre de Bruxelles.
  3. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2001. "Comparative Analysis of Labour Market Outcomes: Lessons for the US from International Long-Run Evidence," CEPR Discussion Papers 3023, C.E.P.R. Discussion Papers.
  4. Winfried Koeniger & Marco Leonardi, 2007. "Capital deepening and wage differentials: Germany versus US," Economic Policy, CEPR;CES;MSH, vol. 22, pages 71-116, 01.
  5. Hugo Ñopo, 2012. "Gender earning gaps around the world: a study of 64 countries," International Journal of Manpower, Emerald Group Publishing, vol. 33(5), pages 464-513, August.
  6. Danièle Meulders & Robert Plasman & François Rycx, 2004. "Minimum wages, low pay and unemployment," ULB Institutional Repository 2013/7740, ULB -- Universite Libre de Bruxelles.
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