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Does Regulation Trade Off Quality against Inequality? The Case of German Architects and Construction Engineers
Author(s) -
RostamAfschar Davud,
Strohmaier Kristina
Publication year - 2019
Publication title -
british journal of industrial relations
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.665
H-Index - 70
eISSN - 1467-8543
pISSN - 0007-1080
DOI - 10.1111/bjir.12445
Subject(s) - german , inequality , exploit , ranking (information retrieval) , quality (philosophy) , distribution (mathematics) , economic inequality , economics , service (business) , net income , demographic economics , labour economics , economy , geography , finance , mathematics , computer science , mathematical analysis , philosophy , computer security , archaeology , epistemology , machine learning
We exploit an exogenous price increase of 10 per cent for architectural services to answer the question how price regulation affects income inequality and service quality. Using individual‐level data from the German microcensus for the years 2006–2012, we find a significant reform effect of 8 per cent on personal net income for self‐employed architects and construction engineers. This group moved from the second lowest to the highest quintile of the net income distribution. This increase in inequality is associated with a deterioration of service quality. The reform reduced average scores of a peer ranking for architects by 18 per cent.