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Wages in the Netherlands: a Micro Approach

  • Stefan Groot

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    Many OECD countries have experienced growing wage inequality since the 1980s. This trend is generally explained by increasing relative demand for skilled labor due to skill biased technological progress and, to some extent, globalization. By using micro data from Statistics Netherlands, this paper examines trends in Dutch (real pre-tax) wage inequality between 2000 and 2005, thus extending the previous literature by covering recent years. We find that inequality, after correcting for observed worker characteristics, decreased somewhat at the lower half of the wage distribution, while increasing slightly at most of the upper half, and relatively strong at the highest few percentiles. Wage growth was also higher for occupation categories with a higher initial wage level, and for workers in the Randstad agglomerations. It is shown that changes in the wage structure are to a large extent explained by prices and quantities of worker characteristics, while changes in the residual wage distribution play a role at the highest percentiles.

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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper1526.pdf
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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1526.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa10p1526
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    1. Rob Euwals & Marike Knoef & Daniel van Vuuren, 2007. "The trend in female labour force participation; what can be expected for the future?," CPB Discussion Paper 93, CPB Netherlands Bureau for Economic Policy Analysis.
    2. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content Of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1279-1333, November.
    3. David Autor & Lawrence Katz & Alan Krueger, 1997. "Computing Inequality: Have Computers Changed the Labor Market?," Working Papers 756, Princeton University, Department of Economics, Industrial Relations Section..
    4. Robert Z. Lawrence, 2008. "Blue-Collar Blues: Is Trade to Blame for Rising US Income Inequality?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa85, May.
    5. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    6. Anthony B. Atkinson & Wiemer Salverda, 2005. "Top Incomes In The Netherlands And The United Kingdom Over The 20th Century," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 883-913, 06.
    7. Fishlow, Albert, 1972. "Brazilian Size Distribution of Income," American Economic Review, American Economic Association, vol. 62(2), pages 391-402, May.
    8. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
    9. 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.
    10. Richard Nahuis & Henri de Groot, 2003. "Rising skill premia; you ain't seen nothing yet?," CPB Discussion Paper 20, CPB Netherlands Bureau for Economic Policy Analysis.
    11. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
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