Hours worked and the U.S. distribution of real annual earnings 1976-2016
Files
Accepted manuscript
Date
2021
DOI
Authors
Fernandez-Val, Ivan
Peracchi, Franco
van Vuuren, Aico
Vella, Francis
Version
OA Version
First author draft
Citation
Ivan Fernandez-Val, Franco Peracchi, Aico van Vuuren, Francis Vella. "Hours Worked and the U.S. Distribution of Real Annual Earnings 1976-2016."
https://arxiv.org/abs/2002.11211
Abstract
We examine the impact of annual hours worked on annual earnings by decomposing
changes in the real annual earnings distribution into composition, structural and hours
effects. We do so via a nonseparable simultaneous model of hours, wages and earnings.
Using the Current Population Survey for the survey years 1976–2019, we find that
changes in the female distribution of annual hours of work are important in explaining
movements in inequality in female annual earnings. This captures the substantial
changes in their employment behavior over this period. Movements in the male hours
distribution only affect the lower part of their earnings distribution and reflect the
sensitivity of these workers’ annual hours of work to cyclical factors.