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Risk aversion and rising wage inequality

Caroli, Eve; Garcia-Peñalosa, Cecilia (2002), Risk aversion and rising wage inequality, Economics Letters, 77, 1, p. 21–26. http://dx.doi.org/10.1016/S0165-1765(02)00095-2

Type
Article accepté pour publication ou publié
Date
2002
Journal name
Economics Letters
Volume
77
Number
1
Publisher
North-Holland
Pages
21–26
Publication identifier
Metadata
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Author(s)
Caroli, Eve
Laboratoire d'Economie de Dauphine [LEDa]
Garcia-Peñalosa, Cecilia
Abstract (EN)
We propose a model in which, as incomes grow, workers become less risk-averse and move from fixed-wagecontracts to variable pay. This can explain the recent increase in wage dispersion between groups, within groups,and over the lifecycle.
Subjects / Keywords
Wage-setting institutions; Inequality; Risk aversion
JEL
J3 - Wages, Compensation, and Labor Costs
O4 - Economic Growth and Aggregate Productivity