Demand spillovers of smash-hit papers: evidence from the ‘Male Organ Incident’

Abstract I decompose the earnings variance of Finnish male and female workers into
its permanent and transitory components using the approach of Baker (1997) and
Haider (2001) in the spirit of scientific replication.
I find that the increasing earnings inequality of men and women is driven by both
the transitory and permanent components of earnings. In addition, I find considerable
differences in the earnings dynamics of men and women, that have been largely
neglected in previous studies of earnings dynamics. The inequality among men is dominated
by the permanent component. Conversely, permanent and transitory components
are of comparable magnitudes to women. As a corollary, men experience more stable
income paths but display larger permanent earnings differences. Women, on the other
hand, face more unstable earnings profiles but show smaller permanent differences in
earnings.