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Earnings inequality and working hours mismatch

Author

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  • Beckmannshagen, Mattis
  • Schröder, Carsten
Abstract
Based on data from the German Socio-Economic Panel, we document a significant rise in monthly earnings inequality between 1993 and 2018. The main contributors are inter-temporal increases in working hours inequality and increases in the covariance between working hours and hourly wages, while changes in the distribution of hourly wages play a minor role. Applying a novel double decomposition technique reveals that these results are particularly pronounced in the growing groups of female employees and service sector employees. If employees had been able to realize their desired optimal working hours, the increase in inequality would have been more moderate. This is mainly due to the fact that employees with low hourly wages work less than desired, a finding that is reinforced over time—even after controlling for various covariates.

Suggested Citation

  • Beckmannshagen, Mattis & Schröder, Carsten, 2022. "Earnings inequality and working hours mismatch," Labour Economics, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:labeco:v:76:y:2022:i:c:s0927537122000756
    DOI: 10.1016/j.labeco.2022.102184
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    Cited by:

    1. Daniele Checchi & Cecilia Garcia-Peñalosa & Lara Vivian, 2022. "Hours Inequality," Working Papers hal-03872764, HAL.
    2. Charlotte Bartels & Carsten Schroeder, 2020. "The role of rental income, real estate and rents for inequality in Germany," Working Papers 7, Forum New Economy.
    3. Heiko Stüber & Markus M. Grabka & Daniel D. Schnitzlein, 2023. "A tale of two data sets: comparing German administrative and survey data using wage inequality as an example," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 57(1), pages 1-18, December.
    4. Dütsch Matthias & Altun Orkun & Grundmann Luisa & Himmelreicher Ralf, 2023. "What Does the German Minimum Wage Do? The Impact of the Introduction of the Statutory Minimum Wage on the Composition of Low- and Minimum-Wage Labour," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(3-4), pages 355-396, June.

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    More about this item

    Keywords

    Earnings inequality; Working hours; Hours mismatch; Part-time work; Decomposition analysis;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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