Inequality for wage earners and self-employed : evidence from panel dataReport as inadecuate




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Editor: Universidad Carlos III de Madrid. Departamento de Economía

Issued date: 2007-03

ISSN: 2340-5031

Serie-No.: UC3M Working papers. Economics07-14

Other version: http:-hdl.handle.net-10016-4684

Keywords: Permanent income inequality , Transitory income inequality , Consumption , Self-employment , Panel data

Rights: Atribución-NoComercial-SinDerivadas 3.0 España

Abstract:In this paper we study the evolution of income inequality for employees and self-employedworkers. We highlight the importance of separately analyzing these different sources ofincome to gain a broader understanding of inequality. Using Spanish panel data oIn this paper we study the evolution of income inequality for employees and self-employedworkers. We highlight the importance of separately analyzing these different sources ofincome to gain a broader understanding of inequality. Using Spanish panel data on incomeand consumption from the ECPF for the period 1987-96, we decompose income shocks intoa permanent and a transitory component. We find that there are noticeable differences in theevolution of income inequality, as well as in the relative importance of the permanent andtransitory components across these groups. Our results point that the evolution of inequalitycan be basically explained by movements in the transitory component of income for theself-employed, while for the employees it is mainly driven by the permanent component,specially at the end of the period. Given these disparities, it seems that these two sources ofincome should be studied separately and that different policies are suitable for each group.+-





Author: Albarrán, Pedro; Carrasco, Raquel; Martínez-Granado, Maite

Source: http://e-archivo.uc3m.es


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