Is earnings inequality in North America as high as previous research has suggested? And how does North America compare to Europe? Previous studies on this topic have found a higher level of earnings inequality in North America than in Continental Europe. However, these studies have focused largely on earnings in a single year. In their forthcoming study on earnings inequality, authors Audra Bowlus and Jean-Marc Robin develop a new methodology for investigating and comparing earnings inequality in North America and Europe. The methodology developed by Bowlus and Robin constructs a measure of lifetime earnings in order to compare lifetime earnings inequality across countries. By focusing on lifetime earnings, the authors find that earnings inequality is smaller in North America than single‑year earnings comparisons would suggest. In fact, due to cross‑country differences in how earnings change over an individual’s lifetime, there may be no difference in lifetime earnings inequality between North America and Europe.

Bibliographic Notes

This research brief was prepared by Emilie McHugh Rivers.