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Wage Inequality in Spain, 1980-2000

  • Manuel A. Hidalgo

    ()

    (Department of Economics, Universidad Pablo de Olavide)

We use recent developments in quantile regression to simulate counterfactuals densities that allows to decompose the Spanish wage inequality evolution over the 1980-2000 period between changes due to observable prices, labour market composition and non observable characteristics' prices. Our empirical results are threefold: first of all, the wage inequality decreases during each decade first half and increases during the second ones, second both changes in prices and composition has an important role in this evolution and third, changes in observable prices mirrors this behavior above and below the median while non observable inequality increases since 1985 onwards below the median, with an erratic trend above. Finally some tentative explanations are give that could reasonably explain our findings.

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File URL: http://www.upo.es/serv/bib/wps/econ0808.pdf
File Function: First version, 2008
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Paper provided by Universidad Pablo de Olavide, Department of Economics in its series Working Papers with number 08.08.

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Length: 34 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:pab:wpaper:08.08
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  1. Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997. "Capital-skill complementarity and inequality: a macroeconomic analysis," Staff Report 239, Federal Reserve Bank of Minneapolis.
  2. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
  3. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," NBER Working Papers 11628, National Bureau of Economic Research, Inc.
  4. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  5. Daron Acemoglu, 2003. "Cross-Country Inequality Trends," Economic Journal, Royal Economic Society, vol. 113(485), pages F121-F149, February.
  6. Lindquist, Matthew J., 2002. "Capital-Skill Complementarity and Inequality Over the Business Cycle," Research Papers in Economics 2002:14, Stockholm University, Department of Economics, revised 01 Sep 2003.
  7. Mario Izquierdo & Aitor Lacuesta, 2006. "Wage inequality in Spain: recent developments," Banco de Espa�a Working Papers 0615, Banco de Espa�a.
  8. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
  9. Michael Keane & Eswar Prasad, 1993. "Skill Levels and the Cyclical Variability of Employment, Hours, and Wages," IMF Staff Papers, Palgrave Macmillan, vol. 40(4), pages 711-743, December.
  10. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June.
  11. Rui Castro & Daniele Coen-Pirani, . "Why Have Aggregate Skilled Hours," GSIA Working Papers 2006-E27, Carnegie Mellon University, Tepper School of Business.
  12. Thomas Lemieux, 2002. "Decomposing changes in wage distributions: a unified approach," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 646-688, November.
  13. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
  14. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
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