Wage dispersion in Germany and the US

Abstract

"Wage compression from below is a common diagnosis for Germany compared to the U.S. We develop alternative hypotheses in order to identify the so-called accordion effect, i.e. reduced inter-quantile distances below the median especially for low skilled and other ill-paid groups. Our results are partly at odds with wide-spread beliefs. Using large micro data sources we find evidence of an accordion effect at the low end of the distribution for the U.S. The results for Germany, however, are contrary to what one would have expected in case of marked wage compression from below. For low-skilled workers of both genders and for female workers in general we find higher inter-quantile distances below rather than above the median. By contrast, there is strong evidence for the accordion effect if skilled male workers are considered." (Author's abstract, IAB-Doku) ((en))

Cite article

Möller, J. (2008): Wage dispersion in Germany and the US. Is there compression from below? In: International economics and economic policy, Vol. 5, No. 4, p. 345-361. DOI:10.1007/s10368-008-0122-z