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The role of employment interruptions and part-time work for the rise in wage inequality

Author

Listed:
  • Martin Biewen

    (University of Tübingen
    IZA)

  • Bernd Fitzenberger

    (IZA
    Humboldt University Berlin
    IFS
    CESifo)

  • Jakob de Lazzer

    (Humboldt University Berlin)

Abstract

The incidence of employment interruptions and temporary part-time work has grown strongly among full-time workers, yet little is known about the impact on wage inequality. This is the first study showing that such episodes play a substantial role for the rise in inequality of full-time wages, considering the case of Germany. While there are also strong composition effects of education for males and of age and experience for females, changes in industry and occupation explain fairly little of the inequality rise. Extending the analysis to total employment reveals substantial negative selection into part-time work. JEL-Classification: J31, J20, J60

Suggested Citation

  • Martin Biewen & Bernd Fitzenberger & Jakob de Lazzer, 2018. "The role of employment interruptions and part-time work for the rise in wage inequality," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-34, December.
    • Handle: RePEc:spr:izalbr:v:7:y:2018:i:1:d:10.1186_s40172-018-0070-y
    DOI: 10.1186/s40172-018-0070-y
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    Cited by:

    1. Gianluca Busilacchi & Giovanni Gallo & Matteo Luppi, 2022. "I would like to but I cannot. The determinants of involuntary part-time employment: Evidence from Italy," Center for the Analysis of Public Policies (CAPP) 0177, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    2. Fitzenberger, Bernd & Seidlitz, Arnim, 2020. "Die Lohnungleichheit von Vollzeitbeschäftigten in Deutschland : Rückblick und Überblick (Wage inequality among the full-time employed in Germany revisited : An overview)," IAB-Discussion Paper 202019, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Fitzenberger, Bernd & Seidlitz, Arnim, 2019. "The 2011 Break in the Part-Time Indicator and the Evolution of Wage Inequality in Germany," IZA Discussion Papers 12529, Institute of Labor Economics (IZA).
    4. Christian Schluter & Mark Trede, 2024. "Spatial earnings inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 22(3), pages 531-550, September.
    5. Markus M. Grabka, 2021. "Ungleichheit der Haushaltsnettoeinkommen — Trends, Treiber, Politikmaßnahmen," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(7), pages 508-515, July.
    6. 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.
    7. Moritz Drechsel‐Grau & Andreas Peichl & Kai D. Schmid & Johannes F. Schmieder & Hannes Walz & Stefanie Wolter, 2022. "Inequality and income dynamics in Germany," Quantitative Economics, Econometric Society, vol. 13(4), pages 1593-1635, November.
    8. Beckmannshagen, Mattis & Schröder, Carsten, 2022. "Earnings inequality and working hours mismatch," Labour Economics, Elsevier, vol. 76(C).
    9. Bernd Fitzenberger & Arnim Seidlitz, 2020. "Die Lohnungleichheit von Vollzeitbeschäftigten in Deutschland: Rückblick und Überblick [Wage inequality among the full-time employed in Germany revisited: An overview]," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 14(2), pages 125-143, July.
    10. Bernd Fitzenberger & Arnim Seidlitz, 2020. "The 2011 break in the part-time indicator and the evolution of wage inequality in Germany," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 54(1), pages 1-14, December.
    11. repec:diw:diwwpp:dp2024 is not listed on IDEAS
    12. Daniel Baumgarten & Gabriel Felbermayr & Sybille Lehwald, 2020. "Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 85-122, January.
    13. Gallego Granados, Patricia & Wrohlich, Katharina, 2019. "Selection into Employment and the Gender Wage Gap across the Distribution and over Time," IZA Discussion Papers 12859, Institute of Labor Economics (IZA).
    14. Seckler, Matthias, 2019. "Increasing inequality in lifetime earnings: A tale of educational upgrading and changing employment patterns," University of Tübingen Working Papers in Business and Economics 119, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    15. Fitzenberger, Bernd & Seidlitz, Arnim, 2019. "The 2011 break in the part-time indicator and the evolution of wage inequality in Germany," ZEW Discussion Papers 19-029, ZEW - Leibniz Centre for European Economic Research.
    16. Meekes, Jordy & Hassink, Wolter H.J., 2022. "Gender differences in job flexibility: Commutes and working hours after job loss," Journal of Urban Economics, Elsevier, vol. 129(C).
    17. Schrenker, Annekatrin, 2023. "Do women expect wage cuts for part-time work?," Labour Economics, Elsevier, vol. 80(C).
    18. Mario Bossler & Thorsten Schank, 2023. "Wage Inequality in Germany after the Minimum Wage Introduction," Journal of Labor Economics, University of Chicago Press, vol. 41(3), pages 813-857.
    19. Bonaccolto-Töpfer, Marina & Castagnetti, Carolina & Rosti, Luisa, 2023. "Changes in the gender pay gap over time: the case of West Germany," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 57, pages 1-11.
    20. Pora, Pierre & Wilner, Lionel, 2020. "A decomposition of labor earnings growth: Recovering Gaussianity?," Labour Economics, Elsevier, vol. 63(C).
    21. Bachmann, Ronald & Felder, Rahel & Tamm, Marcus, 2018. "Labour market participation and atypical employment over the life cycle: A cohort analysis for Germany," Ruhr Economic Papers 786, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    22. repec:diw:diwwpp:dp1791 is not listed on IDEAS
    23. Biewen, Martin & Fitzenberger, Bernd & Seckler, Matthias, 2020. "Counterfactual quantile decompositions with selection correction taking into account Huber/Melly (2015): An application to the German gender wage gap," Labour Economics, Elsevier, vol. 67(C).
    24. Helmut Herwartz & David Rodriguez-Justicia & Bernd Theilen, 2022. "A New Measure of Wage Risk: Occupation-Specific Evidence for Germany," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1427-1462, December.

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    More about this item

    Keywords

    Wage inequality; Part-time employment; Employment interruptions; Composition effects;
    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

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