Rights:
Atribución-NoComercial-SinDerivadas 3.0 España
Abstract:
In this paper we study the evolution of income inequality for employees and self-employed
workers. We highlight the importance of separately analyzing these different sources of
income to gain a broader understanding of inequality. Using Spanish panel data oIn this paper we study the evolution of income inequality for employees and self-employed
workers. We highlight the importance of separately analyzing these different sources of
income to gain a broader understanding of inequality. Using Spanish panel data on income
and consumption from the ECPF for the period 1987-96, we decompose income shocks into
a permanent and a transitory component. We find that there are noticeable differences in the
evolution of income inequality, as well as in the relative importance of the permanent and
transitory components across these groups. Our results point that the evolution of inequality
can be basically explained by movements in the transitory component of income for the
self-employed, while for the employees it is mainly driven by the permanent component,
specially at the end of the period. Given these disparities, it seems that these two sources of
income should be studied separately and that different policies are suitable for each group.[+][-]