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Analyses the effect of a minimum wage on unemployment. Using a model with covered and non‐covered sectors, comparative static analysis is performed with respect to the elasticity of demand for labour in the covered sector, the elasticity of the wage in the non‐covered sector with respect to the size of the non‐covered sector labour force, and the size of the minimum wage. It turns out, contrary to the existing literature, that for none of these parameters is the comparative static effect unidirectional.

This paper devises a new method for using the information contained in income-generating equations to “account for” or “decompose” the level of income inequality in a country and its change over time. In the levels decomposition, the shares attributed to each explanatory factor are independent of the particular inequality measure used. In the change decomposition, methods are presented to break down the contribution of each explanatory factor into a coefficients effect, a correlation effect, and a standard deviation effect. In an application to rising earnings inequality in the United States, it is found that schooling is the single most explanatory variable, only one other variable (occupation) has any appreciable role to play, and all of schooling’s effect was a coefficients effect.

In 1990, the federal government of the United States passed a bill to allow an increase in legal immigration by 1.2 million until 1994. Many questions concerning immigration have been detailed in the economics literature. They concern the effects of immigration on the earnings of the native born, immigration as a form of worker‐sorting, and the allocation schemes concerning the immigration of skilled and non‐skilled workers. Examines the theoretical and empirical answers to these questions. Points out that an examination of immigrant earnings over time often depends on the type of model selected, cohort or cross‐sectional analysis. Also, many immigrants seek a political and economic environment that promotes self‐employment as a form of worker‐sorting. Also of interest, theoretical debate is provided on the nature of immigration, being either political or economic. The debate over immigration has many policy implications for the 1990s, because of the first changes in immigration restrictions since Simpson‐Rodino of 1965.

There are conflicting views of the primary role of income inequality in economic development. Many expect that higher income shares at the top reflect substantial economic contributions while others think that these increases in top shares have not translated into higher economic growth. Recently, this debate has been reinvigorated by a new proposal: higher income inequality could hurt economic performance by decreasing future intergenerational mobility. We contribute to this debate by examining the relationship between intergenerational perceived job status mobility and past income inequality. We find a robust negative association of lagged income inequality with upward intergenerational job status mobility and a robust positive association of lagged income inequality with downward intergenerational job status mobility. In addition, we find that the quality of political institutions and religious fractionalization both contribute positively to job status mobility. Higher levels of past Gross Domestic Product (GDP) result in less upward job status mobility and more downward job status mobility.

This paper studies the cross-country differences in conventional measures of inequality of opportunity in Europe in the space of individual disposable incomes. Exploiting two recent waves of the EUSILC database reporting information on family background (2005 and 2011), we provide estimates of inequality of opportunity in about 30 European countries for two sufficiently distant data points, allowing a check of consistency for country rankings. In addition, we exploit two observations available for most of the countries to explore the relationship between many institutional dimensions and inequality of opportunity, finding evidence of negative correlation with educational expenditure (especially at the pre-primary level) and passive labour market policies.

Understanding how worker well-being is distributed across the population is of paramount importance. With such knowledge policy makers can devise efficient strategies to improve social welfare. This volume contains 13 chapters on topics enhancing our comprehension of inequality across workers. The issues addressed deal directly with the economic institutions that affect individual and family earnings distributions. The themes explored include job training, worker and firm mobility, minimum wages, wage arrears, unions, collective bargaining, unemployment insurance, and schooling. Among the questions answered are: To what extent do greater work hours of women mitigate the widening family earnings distribution? To what extent does deunionization widen the distribution of earnings? Do computers really cause a widening of the earnings distribution? How would the Russian wage distribution change if one accounted for wage arrears? How much of job creation and job destruction comes about because of business relocation? To what extent does maternal education increase children's education? Why do increases in the minimum wage fail to substantially decrease employment as economic theory would predict? And, to what extent do job skills matter for low-income workers?