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Changing selection into full-time work and its effect on wage inequality in Germany

Author

Listed:
  • Bernd Fitzenberger

    (IAB and FAU Erlangen-Nürnberg, IFS, CESifo, IZA, ROA
    IAB (Institute for Employment Research))

  • Jakob Lazzer

    (Humboldt University Berlin)

Abstract

To explore whether changes in the selection into full-time work among German men were a driver in the rise in wage inequality since the mid-1990s, we propose a modification of selection-corrected quantile regressions. Addressing Huber and Melly’s (J Appl Econom 30(7):1144–1168, 2015) concerns, this modification allows us to estimate the effects of selection with respect to both observables and unobservables. Our findings show that those employed in 1995 would have had lower wages in 2010 than those employed in 2010 and wage dispersion would have been higher, suggesting that full-time workers have become less heterogeneous over time.

Suggested Citation

  • Bernd Fitzenberger & Jakob Lazzer, 2022. "Changing selection into full-time work and its effect on wage inequality in Germany," Empirical Economics, Springer, vol. 62(1), pages 247-277, January.
    • Handle: RePEc:spr:empeco:v:62:y:2022:i:1:d:10.1007_s00181-021-02098-0
    DOI: 10.1007/s00181-021-02098-0
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    References listed on IDEAS

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    Cited by:

    1. Stüber, Heiko & Dauth, Wolfgang & Eppelsheimer, Johann, 2023. "A guide to preparing the sample of integrated labour market biographies (SIAB, version 7519 v1) for scientific analysis," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 57, pages 1-7.
    2. Elass, Kenza, 2024. "Male and female selection effects on gender wage gaps in three countries," Labour Economics, Elsevier, vol. 87(C).
    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. Bernd Fitzenberger & Roger Koenker & José Machado & Blaise Melly, 2022. "Economic applications of quantile regression 2.0," Empirical Economics, Springer, vol. 62(1), pages 1-6, January.

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    More about this item

    Keywords

    Wage inequality; Full-time employment; Selection into employment;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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