Compensation Inequality Working paper

摘要

This paper uses Employment Cost Index (ECI) micro data to investigate inequality in compensation rates. The results help fill a gap in our knowledge on this issue, in that currently available data are not as comprehensive as those in the ECI. For example, most public use data lack benefit cost measures. In the cross-section wage inequality understates compensation inequality. This is largely due to differences in the lower half of the wage distribution. The fraction of compensation taken in the form of wages is much higher at the 10th percentile of the compensation distribution than at the median, implying larger compensation than wage differentials across different distributional points in the lower half of the wage distribution. On the other hand, the compensation and wage differentials between workers at the median and the 90th percentile of the wage distribution are roughly equal to each other. The findings differ substantially depending on what benefits are included in the measure of compensation.