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Understanding Wage Inequality in Australia
Author(s) -
Chatterjee Arpita,
Singh Aarti,
Stone Tahlee
Publication year - 2016
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12263
Subject(s) - unobservable , inequality , wage inequality , economics , wage , labour economics , shock (circulatory) , residual , econometrics , mathematics , medicine , mathematical analysis , algorithm
In this paper we document the rise in wage inequality in Australia over the last decade. A key driver of this inequality is unobservable or residual inequality. We decompose residual wage inequality into permanent and transitory components. The estimates of the permanent shock from the first‐difference approach allow us to reconcile life‐cycle wage inequality.