Gender Disparities in Top Earnings:Measurement and Facts for Denmark 1980-2013

Extending the work of Atkinson et al. (J. Econ. Inequal. 16, 225-256, 2018), we decompose top-earnings gender disparities into a glass-ceiling coefficient and a top-earnings gender gap. The decomposition uses that both male and female top earnings are Pareto distributed. If interpreting top-earnings gender disparities as caused by a female-specific earnings tax, the top-earnings gender gap and glass-ceiling coefficient measure the tax level and tax progressivity, respectively. Using Danish data on earnings, we show that the top-earnings gender gap and the glass-ceiling coefficient evolve differently across time, the life cycle, and educational groups. In particular, while the top-earnings gender gap has been decreasing in Denmark over the period 1980-2013, the glass-ceiling coefficient has been remarkably stable

On Using Pareto Distributions for Measuring Top-Income Gender Disparities

Atkinson et al. (2018) propose a measure of the glass ceiling exploiting that top incomes are approximately Pareto distributed. We clarify how this glass-ceiling coefficient describes the increasing scarcity of women further up in the income distribution and show how it relates to the top-income gender gap. If interpreting top income gender differences as caused by a female-specific income tax, the gender gap and glass ceiling coefficient measure its level and progressivity, respectively. Using Danish data on earnings, we show that the top gender gap and the glass-ceiling coefficient evolves across time, the life cycle, and educational groups

Essays on Income Risk and Inequality

Consumption Dynamics under Time-Varying Unemployment Risk We study the response of households' demand for durable goods to fluctuations in unemployment risk. First, using survey data, we document that household durable expenditures react strongly to unemployment risk, while the effect on nondurable expenditures is indistinguishable from zero. Second, we construct a buffer-stock savings model that includes adjustment frictions for durable goods. We show that although not targeted in the calibration, the model reproduces the semi-elasticities of expenditures to unemployment risk estimated in the data. Third, using the model, we find that the inclusion of adjustment frictions raises the aggregate demand response of durable goods to fluctuations in perceived unemployment risk by approximately 200 percent. Moreover, the aggregate consumption dynamics are state dependent. Upon experiencing an adverse risk shock, the responsiveness of durable goods demand to the interest rate and income changes is dampened, thus constraining monetary and fiscal transfer policies in stabilizing consumption during recessions. The Labor-Market Origins of Cyclical Income Risk We use Danish administrative data 1980-2013 to study the underlying mechanisms generating fluctuations in income risk. We partition the population into 37 narrowly defined educational categories and document the cyclicality of labor income risk for each category separately. For the individual educational categories, mean income growth is strongly correlated with income growth skewness, with an average correlation of 0.87-0.88. We show that the connection between income growth skewness and mean income growth is not only strong in the time dimension, but also in the cross section. Across the 37 educational categories, the correlation between mean income growth and income growth skewness is 0.93-0.96. We show that labor-market frictions together with variations in productivity growth generate the relationship between mean income growth and income growth skewness. In a quantitative job-ladder model, variations in productivity growth quantitatively capture both the time-series and cross-sectional relationship. In contrast, variations in the job-finding rate, the job-separation rate and the offer-arrival rate for employed fail to generate the relationship between mean income growth and income growth skewness in our framework. A Pareto-Distribution Perspective on Top-Income Gender Disparities We propose a novel decomposition of top-income gender disparities into a top-income gender gap coefficient, capturing the absolute underrepresentation of women in the top, and a glass ceiling coefficient, capturing the relative underrepresentation of women at the very top given the representation of women at the top. The decomposition uses that the top of both the male and female income distributions are well approximated by Pareto distributions. We apply our decomposition to Danish labor income data 1980-2013. We find that the gender gap coefficient is slowly and steadily falling over the whole period while the glass ceiling coefficient has been stable since 1995. We perform heterogeneity analysis along three dimensions. First, we perform the decomposition for different age groups. The glass ceiling coefficient has been largely stable across both time and age groups since 1995. Second, we perform the decomposition for parents and non-parents. The glass ceiling coefficient is larger for parents, but this stems from the different income distribution of fathers and non-father men. Mothers and non-mothers have similar glass ceiling characteristics. Third, we perform the decomposition for the two most represented educational degrees in the top one percent, medical doctors and lawyers. Whereas the glass ceiling coefficient is small for medical doctors, it is much larger for lawyers. A Note: The Effect of Assortative Mating on Income Inequality I provide a theoretical upper bound on the effect of assortative mating on income inequality by comparing perfect assortative mating with random mating. The percentage drop in the Gini coefficient from perfect assortative to random mating is bounded by 1−   ≈ 29%. Furthermore, I compare the Gini coefficient of the income distribution of actual households with the Gini coefficient under random mating using US census data. Under all specifications, the effect of randomization on the Gini coefficient is never larger than 0.015.

Consumption Dynamics under Time-Varying Unemployment Risk

Private consumption demand falls in response to increased unemployment risk during a recession, as households increase their precautionary savings and postpone irreversible durable investments. The postponement effect is seven times as large as the precautionary-savings effect in a calibrated buffer-stock savings model. In consequence, anticipation of future unemployment risk is more important than realized unemployment shocks in accounting for durable expenditure dynamics during recessions, while the opposite is true for nondurables. The importance of anticipation of future unemployment risk also means that having many ’hand-to-mouth’ households, who do not respond to changes in income risk, significantly dampens the demand response for durables to an adverse labor market shock. We find that the model elasticities of durable and nondurable expenditures with respect to unemployment risk are close to what we estimate in micro survey data

Macroeconomic dynamics with rigid contracts

International audienceWe adapt the wage contracting structure in Chari (1983) to a dynamic, balanced-growth setting with re-contracting à la Calvo (1983). The resulting wage-rigidity framework delivers a model very similar to that in Jaimovich and Rebelo (2009), with their habit parameter replaced by our probability of wage-contract resetting. That is, if wage contracts can be reset very frequently, labor supply behaves in accordance with King, Plosser, and Rebelo (1988) preferences, whereas if they are sticky for a long time, we obtain the setting in Greenwood, Hercowitz, and Huffman (1988), thus allowing significant responses of hours to wage changes

Macroeconomic dynamics with rigid contracts

International audienceWe adapt the wage contracting structure in Chari (1983) to a dynamic, balanced-growth setting with re-contracting à la Calvo (1983). The resulting wage-rigidity framework delivers a model very similar to that in Jaimovich and Rebelo (2009), with their habit parameter replaced by our probability of wage-contract resetting. That is, if wage contracts can be reset very frequently, labor supply behaves in accordance with King, Plosser, and Rebelo (1988) preferences, whereas if they are sticky for a long time, we obtain the setting in Greenwood, Hercowitz, and Huffman (1988), thus allowing significant responses of hours to wage changes

Integrated epi-econ assessment of vaccination

Using an integrated epi-econ model, we compute the value of vaccines for Covid-19, both under a planner’s solution and in competitive equilibrium. The specific model, developed in Boppart, Harmenberg, Hassler, Krusell, and Olsson (2020), factors in not just value-of-life aspects along with standard economic variables but also the value of leisure activities that rely on a social component. We find that the societal value of vaccination is large; we estimate that, translated into monetary terms, the value of vaccinating one young individual in the competitive equilibrium is $17,800. Externalities are large: less than half the societal value is internalized by individuals (assuming that they act purely in their self-interest). Finally, behavioral responses are important, with a substantial share of the value of vaccines being attributed to people enjoying more socially-oriented leisure when more people are vaccinated

Early salvage radiation therapy combined with short-term hormonal therapy in recurrent prostate cancer after radical prostatectomy: Single-institution 4-year data on outcome, toxicity, health-related quality of life and co-morbidities from 184 consecutive patients treated with 70 Gy.

The aim of this study was to investigate the role of 70\ua0Gy salvage radiotherapy (SRT) combined with short-term neoadjuvant hormonal therapy (NHT) in the treatment of recurrent disease after radical prostatectomy (RP), and to consider quality of life (QoL), survival outcomes and impact of co-morbidities on treatment-related rectal-genitourinary toxicity. Electronic records of 184 SRT patients treated consecutively between October 2001 and February 2007 were analyzed. Median age was 64 years (median follow-up 48\ua0months). NHT was given to 165 patients (median 3 months). Pre-RP and pre-SRT PSA, PSA doubling time, Gleason score (GS), seminal vesicle invasion (SVI) and detectable post-SRT PSA were recorded. Any detectable PSA or PSA >0.1 ng/ml + nadir was considered biochemical failure (BcF). The Charlson co-morbidity index was used to correlate co-morbidities and rectal-genitourinary toxicity. Scores from the health-related QoL EORTC QLQ-C30 and PR-25 questionnaires were also evaluated. In 116 (63%) patients, a long-lasting curative effect was indicated by undetectable PSA levels. In univariate analysis, using BcF as an outcome variable, p1.0 ng/ml and 80/134 (60%) patients with PSA doubling time (PSADT) 50% of patients with recurrence after RP with acceptable rectal-genitourinary toxicity and without negatively affecting long-term QoL. Non-metastatic patients should not be disqualified from receiving SRT although presenting with poor prognostic factors at surgery