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On the Link between Job Polarisation and Wage Inequality in Germany

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  • Reinhold, Mario
Abstract
Job polarisation and increasing wage inequality is observed in many rich countries, including Germany. Both phenomena are well-discussed in international literature, though a link can only be observed in the U.S. I assess the impact of job polarisation upon wage inequality in Germany by benefitting from regional variation in job polarisation and applying distributional decomposition methods. Although wage inequality occurs nation-wide the dimension is profoundly larger in polarised labour markets, whereas two thirds of these differences can be explained by differences in the workforce. In contrast to the U.S., there are only slight hints of a direct relationship between occupational and wage changes. They fully vanish once accounting for shifts in skills within occupations. Eventually, the temporal patterns of job polarisation and wage inequality do not match, implying alternative reasons for the increase in wage inequality than occupational shifts.

Suggested Citation

  • Reinhold, Mario, 2016. "On the Link between Job Polarisation and Wage Inequality in Germany," VfS Annual Conference 2016 (Augsburg): Demographic Change 145802, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145802
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    Cited by:

    1. Maximilian Longmuir & Carsten Schröde & Matteo Targa, 2020. "De-Routinization of Jobs and Polarization of Earnings: Evidence from 35 Countries," Working Papers 1397, Economic Research Forum, revised 20 Jun 2020.

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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