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Aggregate Earnings Inequality in Europe: Permanent Differences or Transitory Fluctuations?

Doris, Aedin and O'Neill, Donal and Sweetman, Olive (2010) Aggregate Earnings Inequality in Europe: Permanent Differences or Transitory Fluctuations? NUI Maynooth. (Unpublished)

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Abstract

This paper examines the relationship between aggregate inequality and its underlying components for a number of European countries. We use a well established GMM approach to separate the permanent component from the transitory component of earnings inequality. Our results show that three quarters of the observed cross-country differences in aggregate inequality in Europe is accounted for by differences in permanent inequality, reflecting differences in individual characteristics that persist throughout the life-cycle.

Item Type: Other
Keywords: Permanent Inequality; Transitory Inequality; Generalized Method of Moments; Covariance Structure of Earnings;
Subjects: Social Sciences > Economics
Item ID: 1990
Identification Number: N211-10
Depositing User: Ms Sandra Doherty
Date Deposited: 12 Jun 2012 15:00
Publisher: NUI Maynooth
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