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Title:Flexicurity, wage dynamics and inequality over the life-cycle PDF Logo
Authors:Bingley, Paul
Cappellari, Lorenzo
Westergård-Nielsen, Niels
Issue Date:2011
Series/Report no.:CESifo working paper: Labour Markets 3561
Abstract:We investigate the relationship between life-cycle wages and flexicurity in Denmark. We separate permanent from transitory wages and characterise flexicurity using membership of unemployment insurance funds. We find that flexicurity is associated with lower wage growth heterogeneity over the life-cycle and greater wage instability, changing the nature of wage inequality from permanent to transitory. While we are in general unable to formally test for moral hazard against adverse selection into unemployment insurance membership, robustness checks suggest that moral hazard is the relevant interpretation.
Subjects:unemployment insurance
wage dynamics
wage inequality
wage instability
JEL:J31
J65
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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