ECIN Replication Package for "Dynamics and Sources of Wage Inequality in Taiwan: Evidence from Employer-Employee Matched Data"

Principal Investigator(s): View help for Principal Investigator(s) Po-Chun Huang, Department of Economics, National Chengchi University; Huei-Ming Chen, Department of Economics, National Chengchi University; Hsien-Ming Lien, Department of Public Finance, National Chengchi University; Chung-Hua Institution for Economic Research; Tzu-Ting Yang, Institute of Economics, Academia Sinica

Version: View help for Version V2

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Project Citation:

Huang, Po-Chun, Chen, Huei-Ming, Lien, Hsien-Ming , and Yang, Tzu-Ting. ECIN Replication Package for “Dynamics and Sources of Wage Inequality in Taiwan: Evidence from Employer-Employee Matched Data.” Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2025-10-29. https://doi.org/10.3886/E237283V2

Project Description

Summary: This paper studies the decline in wage inequality in Taiwan from 2004 to 2019 using administrative employer-employee matched data and the Abowd-Kramarz-Margolis (AKM) framework. Unlike the U.S. and Europe, Taiwan experienced an 8.4% drop in wage inequality, driven largely by reductions in within-firm disparities. Minimum wage hikes likely contributed to this compression, as lower-tail inequality declined due to faster earnings growth among low-wage workers, while upper-tail inequality remained relatively stable. AKM estimates, robust to bias correction, indicate that firm-specific wage premiums account for a small share of inequality, while worker-firm sorting has become increasingly important in explaining wage dispersion.

Scope of Project

JEL Classification:
      J21 Labor Force and Employment, Size, and Structure
      J31 Wage Level and Structure; Wage Differentials
      J38 Wages, Compensation, and Labor Costs: Public Policy

Manuscript Number: 4009282

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Published Versions

V2 [2025-10-29]

V1 [2025-08-20]

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