Remembrance of things past the distribution of earnings across occupations and the kappa criterion

Abstract

This paper examines the size distribution of earnings in several occupations with specific reference to functional form. We utilize the kappa criterion from classical statistics to distinguish between various candidates of hypothetical statistical distributions that have been used as approximations to actual empirical earnings graduations. The usual assumption in empirical work is that earnings are lognormally distributed; our findings indicate this functional form canusually be rejected a priori. © 1989.