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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? National University of Ireland 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 (Unpublished)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, Finance & Accounting
Item ID: 2000
Depositing User: Ms Sandra Doherty
Date Deposited: 18 Jun 2010 13:51
Publisher: National University of Ireland Maynooth
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