The Evolution of Employment Dispersion

Abstract

Labor market inequality encompasses both dispersion in earnings and employment. While earnings dispersion is relatively straightforward to assess, employment dispersion presents difficulties. We offer a new approach that uses observable worker-level information to predict employment propensities, then tracks changes in employment at different points in the predicted distribution. This approach is useful for a few purposes: first, to provide a more comprehensive picture of labor market inequality; second, to identify (in a fine-grained way) groups with relatively low employment propensities; and third, to facilitate explorations of how macroeconomic conditions (e.g., tight labor markets) may affect labor market inequality.

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