Abstract
The paper exploits large-scale administrative data to analyse trends in male earnings inequality in Luxembourg during 20 years of rapid economic growth, industrial redevelopment and massive inflow of foreign workers. A detailed error components model is estimated to identify persistent and transitory components of (the trends of) log-earnings variance and to disentangle the contributions to it of native, immigrant and cross-border workers. The model is flexible and allows for a high degree of individual, age, time and cohort heterogeneity. We observe a surprising stability in overall earnings inequality as a result of more complex underlying changes, with marked increases in persistent inequality (except among natives), a growing contribution of foreigners and a decrease in earnings instability (primarily for natives).
Original language | English |
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Pages (from-to) | 409-440 |
Number of pages | 0 |
Journal | Journal of the Royal Statistical Society. Series A: Statistics in Society |
Volume | 181 |
Issue number | 2 |
Early online date | 1 Jan 2017 |
DOIs | |
Publication status | Published - 1 Feb 2018 |
Keywords
- Earnings dynamics
- Minimum distance estimation
- Persistent inequality
- Transitory inequality
- cross-border and immigrant workers
- dministrative data