Trend in PRP broadly stable PRP and wage inequality.

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Presentation transcript:

Trend in PRP broadly stable PRP and wage inequality

PP incidence over time – broad measure of PP 2

PP incidence over time – “bonuses” 3

PP incidence over time – “PRP” 4

Aligns with other work that indicates broad stability in the incidence of PRP in 2000s How to treat irregular bonuses? PRP and wage inequality

Aligns with other work that indicates broad stability in the incidence of PRP in 2000s How to treat irregular bonuses? The devil is in the detail PRP and wage inequality

Wage dispersion over time - men 9

Aligns with other work that indicates broad stability in the incidence of PRP in 2000s How to treat irregular bonuses? The devil is in the detail The importance of selection PRP and wage inequality

RawAdjusted (OLS)Adjusted (FE) Broad PP Men20.4%11.3%2.9% Women13.0%10.0%4.1% Women (FT)10.9%11.1%4.1% Narrow PP Men21.0%9.8%2.1% Women23.4%9.8%3.9% Women (FT)19.1%10.3%3.5% PP and wages 11 Before looking at wage distribution, check whether there is a PP premium at the mean and how much can be explained by selection of workers into jobs. Wages of PP workers are on average 11-24% higher than for FP workers. After controlling for personal and job characteristics, premium is 10-11%, and after controlling for unobserved individual traits it is 2-4%. So on average PP raises wages but there is positive sorting into PP jobs.

Aligns with other work that indicates broad stability in the incidence of PRP in 2000s How to treat irregular bonuses? The devil is in the detail The importance of selection Mechanisms – changes in returns? PRP and wage inequality