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Long Term Earnings Inequality, Earnings Instability and Temporary Employment in Spain: 1993–2000

  • Cervini-Plá, María

    ()

    (Universitat de Girona)

  • Ramos, Xavi

    ()

    (Universitat Autònoma de Barcelona)

This paper provides a longitudinal perspective on changes in Spanish male earnings inequality for the period 1993-2000, by decomposing the earnings covariance structure into its permanent and transitory parts. According to the Spanish sample of the European Community Household Panel, cross-sectional earnings inequality of male full-time employees falls over the second half of the Nineties. The longitudinal analysis shows that such decline was determined by a decrease in earnings instability and an increase of the permanent earnings component. Given the marked decline in temporary employment over the sample period, we also examine the effect of the type of contract on earnings variance components, and we find that workers with fixed-term contract have on average more instability than workers with permanent contract. This evidence suggests that the decline in temporary employment is responsible for the decreasing earnings instability.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3538.

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Length: 25 pages
Date of creation: Jun 2008
Date of revision:
Publication status: published online in: British Journal of Industrial Relations, 2011, 50(4), 714-736
Handle: RePEc:iza:izadps:dp3538
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  1. Lorenzo Cappellari & Marco Leonardi, 2007. "Earnings Instability and Tenure," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0048, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
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  3. Richard Blundell & Ian Preston, 1997. "Consumption, inequality and income uncertainty," IFS Working Papers W97/15, Institute for Fiscal Studies.
  4. 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.
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  13. Cappellari, Lorenzo, 2000. "The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?," ISER Working Paper Series 2000-41, Institute for Social and Economic Research.
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