Earnings Mobility in the EU: 1994-2001

Denisa Sologon and Cathal O'Donoghue

No 2010-36, LISER Working Paper Series from Luxembourg Institute of Socio-Economic Research (LISER)

Abstract: Using a consistent comparative dataset for 14 EU countries, we explore the earnings mobility-inequality linkage in the EU over the period 1994-2001 on two axes: first the evolution of short-term mobility and its link with cross-sectional inequality; second, the evolution of long-term mobility relative to short-term mobility and the implications for lifetime or long-term inequality. We use two types of mobility measures: (i) a rank measure derived from the changes in the individual ranks in the earnings distribution; (ii) a recent measure of mobility as an equalizer of longer-term incomes, complementary to the wellknown Shorrocks index. We find evidence supporting a negative association between the evolution of cross-sectional inequality and short-term rank mobility across the EU. Long-term, Denmark appears to have the most mobile earnings distribution with the second highest equalizing effect in the EU. The only disequalizing mobility in a lifetime perspective is found in Portugal. Besides making a substantive contribution to the literature on cross-national comparisons of earnings mobility at the EU level, our paper brings evidence to the debate regarding the ability of the Shorrocks index in capturing the true equalizing/disequalizing effect of mobility.

Keywords: panel data; wage distribution; inequality; mobility (search for similar items in EconPapers)
JEL-codes: C23 D31 J31 J60 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2010-11
New Economics Papers: this item is included in nep-lab
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