Inequality for Wage Earners and Self-Employed: Evidence from Panel Data

In this paper we highlight the importance of analysing the evolution of income inequality separately for employees and self‐employed workers. Using Spanish panel data on income and consumption for the period 1987–96, we find noticeable differences across these groups in the evolution of income inequ...

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Bibliographic Details
Published in:Oxford bulletin of economics and statistics 2009-08, Vol.71 (4), p.491-518
Main Authors: Albarran, Pedro, Carrasco, Raquel, Martinez-Granado, Maite
Format: Article
Language:English
Subjects:
D12
D31
D91
E21
Economic policy
Employees
Income inequality
Panel data
Self employment
Self-employed workers
Spain
Studies
Wage differentials
Wage rates
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Summary:In this paper we highlight the importance of analysing the evolution of income inequality separately for employees and self‐employed workers. Using Spanish panel data on income and consumption for the period 1987–96, we find noticeable differences across these groups in the evolution of income inequality, and in the relative importance of the transitory and permanent components of income variance. The evolution of inequality is mainly explained by movements in the transitory component for the self‐employed and by the permanent component for the employees. Our results suggest that different policies should be implemented for each group.
ISSN:0305-9049
1468-0084
DOI:10.1111/j.1468-0084.2009.00549.x