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Earnings Inequality and Working Hours Mismatch

Aufsätze referiert extern - Web of Science

Mattis Beckmannshagen, Carsten Schröder

In: Labour Economics 76 (2022), 102184, 22 S.


Based on data from the German Socio-Economic Panel, we document a significant rise in monthly earnings in- equality between 1993 and 2018. The main contributors are inter-temporal increases in working hours inequality and increases in the covariance between working hours and hourly wages, while changes in the distribution of hourly wages play a minor role. Applying a novel double decomposition technique reveals that these results are particularly pronounced in the growing groups of female employees and service sector employees. If employees had been able to realize their desired optimal working hours, the increase in inequality would have been more moderate. This is mainly due to the fact that employees with low hourly wages work less than desired, a finding that is reinforced over time —even after controlling for various covariates.

Carsten Schröder

Board of Directors SOEP and Division Head Applied Panel Analysis in the German Socio-Economic Panel study Department

JEL-Classification: D63;J22;J31
Keywords: Earnings inequality, working hours, hours mismatch, part-time work, decomposition analysis