Using Social Security Data to Estimate Earnings Inequality

Stéphane Bonhomme3, Laura Hospido 1
1Bank of Spain, Spain, 2IZA, Germany, 3CEMFI, Spain, 4NYU, USA

In this paper we use Social Security Data to characterize the evolution of wage inequality in Spain from 1980 to 2007. We use detailed administrative information on labor earnings and employment at a monthly frequency. As is common in administrative records, our measure of labor earnings is top and bottom-coded. To recover wages for those capped observations we use several estimates of the marginal distributions. In addition, we use the panel structure of the data to impute wages for the non employed. This correction would be specially relevant in the case of Spanish women.

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