The Wage Curve Across the Wealth Distribution

Authors: Roberto Iacono and Marco Ranaldi

Publication: Economics Letters. vol. 196

Date: November 2020 

Abstract:

This paper studies the relationship between wages and the unemployment rate across the wealth distribution. Using microdata from Norway covering the entire population of residents between 2000 and 2015, we introduce four novel findings on this relationship. First, the share of unemployed individuals belonging to the bottom decile of the gross wealth distribution is tenfold larger than that belonging to the top decile (34% and 3.2%, respectively). Second, the share of unemployed individuals belonging to the bottom decile of the gross wealth distribution moves in the opposite manner to that of the top decile. Third, the negative slope of the wage curve is confirmed. Fourth, the wage-to-unemployment ratio increases monotonically with gross wealth.

Link: The Wage Curve Across the Wealth Distribution

Preprint Version: Stone Center Working Paper Series no. 19