Understanding lifetime earnings inequality through hours worked

Cătălin Roșioru

Lifetime earnings in the US are highly unequal. This column examines a frequently overlooked factor to explain the persistence of lifetime earnings inequality: long-term differences in hours worked. Even among men who are very attached to the US labour market, lifetime differences in hours worked are substantial and correlate strongly with both lifetime earnings and lifecycle earnings growth. Through the lens of a human capital model, almost 20% of the variance in lifetime earnings for these