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Hours worked and the US distribution of real annual earnings 1976–2019

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  • Iván Fernández‐Val
  • Aico van Vuuren
  • Francis Vella
  • Franco Peracchi

Abstract

We examine the impact of annual hours worked on annual earnings by decomposing changes in the real annual earnings distribution into composition, structural, and hours effects. We do so via a nonseparable simultaneous model of hours, wages, and earnings. Using the Current Population Survey for the survey years 1976–2019, we find that changes in the female distribution of annual hours of work are important in explaining movements in inequality in female annual earnings. This captures the substantial changes in their employment behavior over this period. Movements in the male hours' distribution only affect the lower part of their earnings distribution and reflect the sensitivity of these workers' annual hours of work to cyclical factors.

Suggested Citation

  • Iván Fernández‐Val & Aico van Vuuren & Francis Vella & Franco Peracchi, 2024. "Hours worked and the US distribution of real annual earnings 1976–2019," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 39(4), pages 659-678, June.
    • Handle: RePEc:wly:japmet:v:39:y:2024:i:4:p:659-678
    DOI: 10.1002/jae.3039
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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J00 - Labor and Demographic Economics - - General - - - General

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