Labor Earnings Mobility and Inequality in the United States and Germany during the Growth Years of the 1980s

Richard Burkhauser, Douglas Holtz-Eakin and Stephen E Rhody

International Economic Review, 1997, vol. 38, issue 4, 775-94

Abstract: Recent years have witnessed increased interest in issues of inequality and mobility in the labor market. Using data from the Panel Study of Income Dynamics and the German Socio-Economic Panel, we compare the labor earnings mobility of prime age men and women in the United States and Germany during the growth-years. Despite major differences in labor market institutions we find very similar patterns in the two countries. Our formal models of labor earnings dynamics suggest a great deal of persistence in both countries. In the United States this may derive from permanent individual specific differences among men, while in Germany random shocks are found to persist longer for men. Women in Germany and the United States have similar earnings dynamics. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1997
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