Using a data-set of OECD countries from 1980 to 2004, we assess the cross-country evidence on the trade-off between wage inequality and employment performance by relying on Data Envelopment Analysis, a nonparametric technique usually employed in the analysis of productive efficiency. DEA allows for the simultaneous determination of inequality and employment and treats the potential trade-off between inequality and employment in a very flexible way. We attribute the variations in the rates of unemployment and non-employment to two components: the changes due to a variation in wage inequality along the inequality-employment trade-off and the changes in efficiency which simultaneously affect inequality and employment). We find that changes in efficiency are a fairly important component of total changes.

Winds of Change and Policies. The Inequality-Employment Trade-off in the OECD

DESTEFANIS, Sergio Pietro;
2008-01-01

Abstract

Using a data-set of OECD countries from 1980 to 2004, we assess the cross-country evidence on the trade-off between wage inequality and employment performance by relying on Data Envelopment Analysis, a nonparametric technique usually employed in the analysis of productive efficiency. DEA allows for the simultaneous determination of inequality and employment and treats the potential trade-off between inequality and employment in a very flexible way. We attribute the variations in the rates of unemployment and non-employment to two components: the changes due to a variation in wage inequality along the inequality-employment trade-off and the changes in efficiency which simultaneously affect inequality and employment). We find that changes in efficiency are a fairly important component of total changes.
2008
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11386/1866765
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