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Article
Earnings Distributions of Scalable vs. Non-Scalable Occupations
Physica A (2020)
  • Adriano Maia, Federal University of Santa Catarina
  • Raul Matsushita, University of Brasilia
  • Sergio Da Silva, Federal University of Santa Catarina
Abstract
It has been suggested that occupations where one is paid by the hour are not scalable, while scalable occupations allow one to make more money without an equivalent increase in labor and time. Non-scalable occupations are expected to have low income variance, whereas scalable ones show large income inequalities. This study examines the evidence for this suggested categorizing using personal earnings microdata for twelve candidate occupations of both types, scalable and not. We find the upper tails of all distributions decay as power laws. Moreover, we cannot reject the suggested categorizing for earnings above medians.

"13 1/2 years after The Black Swan someone formally investigated my statement about the tail difference between SCALABLE (authors) and NONSCALABLE (dentist, prostitute) occupations."
- Post by Nassim Nicholas Taleb @nntaleb 8:36AM . Sep 8, 2020

Keywords
  • Earnings distribution,
  • Income distribution,
  • Scalable occupations,
  • Pareto distribution,
  • Power laws
Publication Date
2020
DOI
https://doi.org/10.1016/j.physa.2020.125192
Citation Information
Adriano Maia, Raul Matsushita and Sergio Da Silva. "Earnings Distributions of Scalable vs. Non-Scalable Occupations" Physica A Vol. 560 (2020) p. 125192 ISSN: 0378-4371
Available at: http://works.bepress.com/sergiodasilva/216/