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The cycle of earnings inequality: evidence from Spanish social security data

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  • Stéphane Bonhomme

    (CEMFI)

  • Laura Hospido

    (Banco de España)

Abstract

We use detailed information on labor earnings and employment from Social Security records to document earnings inequality in Spain from 1988 to 2010. Male earnings inequality was strongly countercyclical: it increased around the 1993 recession, showed a substantial decrease during the 1997-2007 expansion and then a sharp increase during the recent recession. These developments were partly driven by the cyclicality of employment and earnings in the lower-middle part of the distribution. We emphasize the importance of the housing boom and subsequent housing bust, and show that demand shocks in the construction sector significantly impacted aggregate labor market outcomes

Suggested Citation

  • Stéphane Bonhomme & Laura Hospido, 2012. "The cycle of earnings inequality: evidence from Spanish social security data," Working Papers 1225, Banco de España.
    • Handle: RePEc:bde:wpaper:1225
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    More about this item

    Keywords

    Earnings inequality; social security data; unemployment; business cycle;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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