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Less Income Inequality and More Growth – Are they Compatible? Part 7. The Drivers of Labour Earnings Inequality – An Analysis Based on Conditional and Unconditional Quantile Regressions
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- Jean-Marc Fournier1, Isabell Koske1
- Author Affiliations
- 1: OECD, France
- 09 Jan 2012
- Bibliographic information
Unconditional and conditional quantile regressions are used to explore the determinants of labour earnings at different parts of the distribution and, hence, the determinants of overall labour earnings inequality. The analysis combines several household surveys to provide comparable estimates for 32 countries. The empirical work suggests that, in general, a rise in the share of workers with an upper-secondary or post-secondary non-tertiary degree, a rise in trade union membership, a rise in the share of public employment and a rise in the share of workers on permanent contracts are associated with a narrowing of the earnings distribution. By contrast, a shift in the sector composition of the economy is not found to have a large impact on overall earnings inequality. As for tertiary education, the impact remains ambiguous as there are several offsetting forces.
- labour income, quantile regression, education, union membership, income inequality, temporary work contract, public employment
- JEL Classification:
- C21: Mathematical and Quantitative Methods / Single Equation Models; Single Variables / Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions
- D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
- I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality
- J41: Labor and Demographic Economics / Particular Labor Markets / Labor Contracts
- J45: Labor and Demographic Economics / Particular Labor Markets / Public Sector Labor Markets
- J51: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining / Trade Unions: Objectives, Structure, and Effects