July 2014

IZA Policy Paper No. 89: Earnings Inequality

published in: International Encyclopedia of the Social & Behavioral Sciences, 2nd edition, 2015, Vol. 6, 765-772

Inequality has increased considerably in many Western countries over the past decades. When dealing with economic inequality as a research subject the question "inequality of what among whom" arises. Analyses of inequality are typically concerned with the distribution of wages, earnings or income and have been performed by different strands in the literature, mainly in public and in labor economics. We summarize these strands with a special focus on earnings which itself is the product of hourly wages and labor supply in terms of hours and weeks worked. In addition to inequality in labor market outcomes, we additionally pay special attention to equality of opportunity.