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The great compression of the French wage structure, 1969–2008

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  • Gregory Verdugo

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Wage inequality decreased continuously in France from 1969 to 2008. In contrast to the US and the UK, this period was also characterised by a substantial increase in the educational attainment of the labour force. This paper investigates whether differences in the timing of educational expansion over the last forty years can explain the divergent evolution of upper tail wage inequality in France relative to other countries. Using a model with imperfect substitution between experience groups, the estimates suggest that the rapid increase in the supply of educated workers during the 1970s and 1990s produced a substantial decline in the skill premium within cohorts. As a result, between a third and half of the decline in wage inequality at the top of the distribution in France during this period is explained by the increase in the educational attainment of the labour force.

Suggested Citation

  • Gregory Verdugo, 2014. "The great compression of the French wage structure, 1969–2008," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01296762, HAL.
  • Handle: RePEc:hal:cesptp:hal-01296762
    DOI: 10.1016/j.labeco.2014.04.009
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    More about this item

    Keywords

    France; Wage inequality; Earnings inequality;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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