Changing selection into full-time work and its effect on wage inequality in Germany

To explore whether changes in the selection into full-time work among German men were a driver in the rise in wage inequality since the mid-1990s, we propose a modification of selection-corrected quantile regressions. Addressing Huber and Melly’s (J Appl Econom 30(7):1144–1168, 2015) concerns, this...

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Bibliographic Details
Published in:Empirical economics 2022-01, Vol.62 (1), p.247-277
Main Authors: Fitzenberger, Bernd, de Lazzer, Jakob
Format: Article
Language:English
Subjects:
Accounting
Econometrics
Economic theory
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Employment
Finance
Full-time employment
Gender pay gap
Inequality
Insurance
Labor market
Management
Selection into employment
Statistics for Business
Wage differential
Wage inequality
Wages & salaries
Workers
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Summary:To explore whether changes in the selection into full-time work among German men were a driver in the rise in wage inequality since the mid-1990s, we propose a modification of selection-corrected quantile regressions. Addressing Huber and Melly’s (J Appl Econom 30(7):1144–1168, 2015) concerns, this modification allows us to estimate the effects of selection with respect to both observables and unobservables. Our findings show that those employed in 1995 would have had lower wages in 2010 than those employed in 2010 and wage dispersion would have been higher, suggesting that full-time workers have become less heterogeneous over time.
ISSN:1435-8921
0377-7332
1435-8921
DOI:10.1007/s00181-021-02098-0