Equalizing or Disequalizing Lifetime Earnings Differentials? Earnings Mobility in the EU: 1994-2001

Denisa Sologon and Cathal O'Donoghue

No 4642, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Do EU citizens have an increased opportunity to improve their position in the distribution of lifetime earnings? To what extent does earnings mobility work to equalize/disequalize longer-term earnings relative to cross-sectional inequality and how does it differ across the EU? Our basic assumption is that mobility measured over a horizon of 8 years is a good proxy for lifetime mobility. We used the Shorrocks (1978) and the Fields (2008) index. Moreover, we explored the impact of differentials attrition on the two indices. The Fields index is affected to a larger extent by differential attrition than the Shorrocks index, but the overall conclusions are not altered. Based on the Shorrocks (1978) index men across EU have an increasing mobility in the distribution of lifetime earnings as they advance in their career. Based on the Fields index (2008) the equalizing impact of mobility increases over the lifetime in all countries, except Portugal, where it turns negative for long horizons. Thus, Portugal is the only country where mobility acts as a disequalizer of lifetime differentials. The highest lifetime mobility is recorded in Denmark, followed by UK, Belgium, Greece, Ireland, Netherlands, Italy, France, Spain, Germany, and the lowest, Portugal. The highest mobility as equalizer of longer term inequality is recorded in Ireland and Denmark, followed by France and Belgium with similar values, then UK, Greece, Netherlands, Germany, Spain and Italy.

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: 65 pages
Date: 2009-12
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (4)

Published - published in: John A. Bishop and Rafael Salas (eds.), Inequality, Mobility, and Segregation: Essays in Honor of Jacques Silber (Research in Economic Inequality, Vol 20), 2012, Emerald Group Publishing Limited, 237-283

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Working Paper: Equalizing or Disequalizing Lifetime Earnings Differentials?: Earnings Mobility in the EU: 1994-2001 (2009)
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