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Dynamics in Transitory and Permanent Variation of Wages in Germany

Aufsätze referiert extern - Web of Science

Michal Myck, Richard Ochmann, Salmai Qari

In: Economics Letters 113 (2011), 2, S. 143-146


We employ covariance structure models to decompose the cross-sectional variance of male wages in Germany into its permanent and transitory parts. We find that the steep growth of cross-sectional inequality during the early 2000s is predominantly driven by transitory factors.

JEL-Classification: C23;D31;J31
Keywords: Variance decomposition, Wage inequality, Wage dynamics