The evolution of the earnings distribution in a volatile economy: Evidence from Argentina

Abstract

This paper studies earnings inequality and dynamics in Argentina between 1996 and 2015. Following the 2001–2002 crisis, the Argentine economy transitioned from a low‐ to a high‐inflation regime, while collective bargaining and the minimum wage gained influence. This transition was associated with a persistent decrease in earnings dispersion and cyclical movements in higher‐order moments of the distribution of earnings changes. To shed light on the changing nature of wage rigidity during this period, we develop a new method to estimate regular‐wage processes. As the Argentine economy transitioned from low to high inflation, the monthly frequency of regular‐wage changes almost doubled, while the distribution of regular‐wage changes morphed from having a mode around zero and positive skewness to having a positive mode and more symmetric tails.

Inequality and dynamics of earnings and disposable income in Denmark 1987–2016

“…The pattern, where the difference between the 90th and 10th percentiles, p90-p10, is decreasing over the life cycle, is similar to Norway (Halvorsen, Ozkan, and Salgado (2022)) and Sweden (Friedrich, Laun, and Meghir (2022), and to some degree, France (Kramarz, Nimier-David, and Delemotte (2022)), Brazil (Engbom, Gonzaga, Moser, and Olivieri (2022)), Argentina (Blanco, Diaz de Astarloa, Drenik, Moser, and Trupkin (2022)), and Germany (Drechsel-Grau, Peichl, Schmid, Schmieder, Walz, and Wolter (2022)), but it appears not to be the typical pattern in Canada (Bowlus, Gouin-Bonenfant, Liu, Lochner, and Park (2022)), the UK (Bell, Bloom, and Blundell (2022)), Italy (Hoffmann, Malacrino, and Pistaferri (2022)), Spain (Arellano, Bonhomme, De Vera, Hospido, and Wei ( 2022)), and Mexico (Puggioni, Calderón, Cebreros Zurita, Fernández Bujanda, Gonzalez, and Jaume (2022)).…”

U.S. long‐term earnings outcomes by sex, race, ethnicity, and place of birth

“…Indeed, the U.S. Census Bureau produces an annual report that documents changing trends in income and earnings inequality by demographic characteristics based on the Current Population Survey-Annual Social and Economic Supplement (CPS ASEC) (see, e.g., Semega,Kollar,Shrider,1 We focus our discussion on the U.S., but the cross-country nature of the Global Repository of Income Dynamics project (https://grid-database.org) allows for a comparison to other countries such as Argentina that are characterized by macroeconomic instability. See Blanco, Diaz de Astarloa, Drenik, Moser, and Trupkin (2021).…”

“…11 We focus our discussion on the U.S., but the cross‐country nature of the Global Repository of Income Dynamics project (https://grid‐database.org) allows for a comparison to other countries such as Argentina that are characterized by macroeconomic instability. See Blanco, Diaz de Astarloa, Drenik, Moser, and Trupkin (2021). …”

Inequality, income dynamics, and worker transitions: The case of Mexico

“…The nonparametric approach used in our analysis is closely related to the work of Bonhomme and Hospido (2017) for Spain and Guvenen et al (2017) and Guvenen et al (2021) for the United States. To the best of our knowledge, we are the first to provide such a characterization of the earnings distribution of private‐sector formal workers in Mexico that is based on administrative records and, together with Engbom, Gonzaga, Moser, and Olivieri (2022) and Blanco, Díaz de Astarloa, Drenik, Moser, and Trupkin (2022), the first to do so in the context of an emerging economy whose labor market significantly differs from those of more advanced economies 5 . Note that all the results presented in Sections 3.1–3.3 distinguish between men and women, and results for the whole sample are presented in Appendix B of the Online Supplementary Material.…”