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More unequal, but more mobile? Earnings inequality and mobility in OECD countries

Andrea Garnero, Alexander Hijzen () and Sébastien Martin

Labour Economics, 2019, vol. 56, issue C, 26-35

Abstract: This paper provides comprehensive cross-country evidence on the relationship between earnings inequality and intra-generational mobility by simulating individual earnings and employment trajectories using short panels for 24 OECD countries. On average across countries, only 20% of earnings inequality in a given year evens out over the life cycle as a result of mobility. This suggests that the bulk of earnings inequality at a given time is permanent. Moreover, mobility and inequality are positively correlated across countries, suggesting that international differences in life-time inequality tend to be less pronounced than inequality differences in a given year. The positive correlation is largely driven by employment mobility – movements between employment and unemployment – and most pronounced in the bottom of the distribution.

Keywords: Intra-generational mobility; Life-time inequality; Earnings-experience profiles; Simulation (search for similar items in EconPapers)
JEL-codes: E24 J30 J62 O57 (search for similar items in EconPapers)
Date: 2019
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Working Paper: More Unequal, But More Mobile? Earnings Inequality and Mobility in OECD Countries (2016) Downloads
Working Paper: More unequal, but more mobile?: Earnings inequality and mobility in OECD countries (2016) Downloads
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