Template-Type: ReDIF-Paper 1.0

Author-Name: Philipp Ehrl
Author-X-Name-First: Philipp 
Author-X-Name-Last: Ehrl

Title: A breakdown of residual wage inequality in Germany

	
Abstract: The present paper applies several regression-based decomposition methods to analyze the impact of region-, worker-, firm- and sector-specific determinants on the
wage level and the continuous increase in wage inequality between 1995 and 2007 in Germany. In contrast to prior studies, more than 50% of the wage dispersion and
almost the entire increase in wage inequality are explained in this approach. Altogether, the entire growth of wage dispersion occurs within regions and changes in the
composition of wage determinants are minor compared to changes in their returns. I find that occupational attributes are the most important wage determinant. Changes
in the firm size premium in combination with assortative matching also depress wages in the bottom of the distribution while they increase wages at the top. Workers with
an unemployment record or an occupation in the service, construction and logistics sectors particularly experience falling wages.
Length:  41 pages
Creation-Date:  2014-05
File-URL: http://www.bgpe.de/texte/DP/150_Ehrl.pdf
File-Format: Application/pdf
File-Function: First version, 2014
Number: 150
Classification-JEL: J31, J24, R12
Keywords: wage inequality, skill based technical change, inequality decompositions
Handle: RePEc:bav:wpaper:150_Ehrl