I decompose the cross-sectional variance of male annual earnings in Sweden between 1960 and 1990 into permanent and transitory components. The transitory variance increased until the early 1970s, declined during the remainder of the decade and then rose again during the second half of the 1980s....

Using a rich longitudinal database, I study the dynamics behind changes in the distribution of annual earnings in Sweden 1991 to 1999. The analysis indicates a systematic increase in persistent earnings differentials during the 1990s; workers with low relative earnings in the beginning of the...

Earlier studies on income inequality and crime have typically used total income or total earnings. However, it is quite likely that it is changes in permanent rather than in transitory income that affects crime rates. The purpose of this paper is therefore to disentangle the two effects by,...

Employing econometric methods for univariate time series, this paper investigates the empirical validity of assuming a unit root in individuals' labor-income processes. Using a Swedish register-based longitudinal dataset which allows us to follow a cohort of workers from 1968 to 2005, we are...

Using the Survey of Income and Program Participation (SIPP), we document a significant and positive association between earnings risk (both permanent and transitory) and the level of earnings across 21 industries. We propose an equilibrium framework to analyze the interplay between earnings...

This paper studies the level and the causes of earnings inequality in late nineteenth century America and Britain using microdata from the United States Commissioner of Labor Survey in 1890 and 1891. We examine whether lessons from studies on changes in earnings inequality over time -- the...

It is well known that the self-employed are over-represented at the bottom as well as the top of the income distribution. This paper shifts the focus from the income situation of the self-employed to the distributive effects of a change in self-employment rates. With representative German data...

This paper formulates a simple skill and education model to illustrate how better access to higher education can lead to stronger assortative mating on skills of parents and more polarized skill and earnings distributions of children. Swedish data show that in the second half of the 20th century...

This paper analyzes earnings inequality and earnings dynamics in Sweden over 1985- 2016. The deep recession in the early 1990s marks a historic turning point with a massive increase in earnings inequality and earnings volatility, and the impact of the recession and the recovery from it lasted...

Many studies use matched employer-employee data to estimate a statistical model of earnings determination where log-earnings are expressed as the sum of worker effects, firm effects, covariates, and idiosyncratic error terms. Estimates based on this model have produced two influential yet...