The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data | Zendy

Bonhomme Stéphane | Zendy; Hospido Laura | Zendy

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The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data

Author(s) -

Bonhomme Stéphane,

Hospido Laura

Publication year - 2017

Publication title -

the economic journal

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.683

H-Index - 160

eISSN - 1468-0297

pISSN - 0013-0133

DOI - 10.1111/ecoj.12368

Subject(s) - earnings , economics , bust , boom , recession , inequality , social security , business cycle , labour economics , wage inequality , distribution (mathematics) , great recession , wage , macroeconomics , market economy , finance , mathematical analysis , mathematics , environmental engineering , engineering

We use detailed information from social security records to document the evolution of male earnings inequality and employment in Spain from 1988 to 2010. We find that inequality was strongly countercyclical: it increased around the 1993 recession, experienced a substantial decrease during the 1997–2007 expansion and then a sharp increase during the recent recession. This evolution went in parallel with the cyclicality of employment in the lower middle part of the wage distribution. Our findings highlight the importance of the housing boom and bust in this evolution, suggesting that demand shocks in the construction sector had large effects on aggregate labour market outcomes.

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