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Do high incomes reflect individual performance? The determinants of high incomes in Germany

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  • Hirschel, Dierk

Abstract

In neoclassical economic theory the level of individual income is predominantly determined by individual job performance. Thus high incomes reflect the high marginal productivity of labour of the affluent working population. While the scientific research of poverty has a long tradition, nearly nothing is known about the rich. This study tries to diminish this research gap by investigating the structure of high labour incomes in Germany. By revealing the determinants of high incomes by descriptive and paneleconometric analyses mit Daten des Sozio-ökonomischen Panels, we want to answer the question if high incomes are especially the result of individual job performance or rather the result of social selection through social background or sexual discrimination

Suggested Citation

  • Hirschel, Dierk, 2003. "Do high incomes reflect individual performance? The determinants of high incomes in Germany," MPRA Paper 5978, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:5978
    as

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    File URL: https://mpra.ub.uni-muenchen.de/5978/1/MPRA_paper_5978.pdf
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    References listed on IDEAS

    as
    1. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
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    3. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    4. Schmidt, Christoph M & Zimmermann, Klaus F, 1991. "Work Characteristics, Firm Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 705-710, November.
    5. Altonji, Joseph G & Dunn, Thomas A, 1996. "The Effects of Family Characteristics on the Return to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 692-704, November.
    6. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
    7. Robert Erikson & John H. Goldthorpe, 2002. "Intergenerational Inequality: A Sociological Perspective," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 31-44, Summer.
    8. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    9. William T. Dickens & Lawrence F. Katz, 1986. "Interindustry Wage Differences and Industry Characteristics," NBER Working Papers 2014, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    High incomes; social background; discrimination; human capital; job performance; GSOEP; theory of justice;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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