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Dynamics in transitory and permanent variation of wages in Germany

Author: 

Myck, Michal / Ochmann, Richard / Qari, Salmai

We employ covariance structure models to decompose the cross-sectional variance of male wages in Germany into its permanent and transitory parts. We find that the steep growth of cross-sectional inequality during the early 2000s is predominantly driven by transitory factors.

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Published:   Economics Letters, 2011, 113(2), pp. 143–146.