Journal Article
Earnings Inequality – Does the Accounting Period Matter?
Schmollers Jahrbuch, Vol. 132, No. 2, pp. 297-321.
Authors
Publication Date
DOI
JEL Classification
D31
D63
O15
Related Topics
Welfare State
Labor Market
Germany
Under mild assumptions, Shorrocks (1978) has proved that measured inequality must decrease when the period over which income is measured, the accounting period, increases. The present work seeks to shed light on the quantitative size of this effect using a huge representative German database for the period 1975–2004. Our results indicate that the choice of the accounting period not only seriously affects the level of inequality. We can also show that the size of the effect varies over time.
