Wage earnings volatility in the private sector in France since 1968

N. Ceci-Renaud, P. Charnoz and M. Gaini
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N. Ceci-Renaud: Crest
P. Charnoz: Insee
M. Gaini: Crest

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: We model wage earnings profiles in order to decompose their cross sectional variance in permanent inequalities and transitory volatility. We use the DADS panel from 1968 to 2008 and focus on men between 25 and 55 year old, wage earners in the private sector. We find that volatility amounts to at least one third of cross sectional variance and that it is higher but less persistent for younger people (ages 26-35). After a period of great stability from the end of the 60s to the beginning of the 80s, wage earnings volatility increased between 1980 and 1988, then decreased in the 90s. The level of volatility in the 2000s is thus not higher than in the 70s. These results are robust to various specifications and we propose an original data balancing method to limit selection bias in the temporal evolutions. On our data, selection of individuals turns out to be more important than specification choices. Our results give a posteriori credit to descriptive approaches using annual wage growth variances.

Keywords: earning inequality; earning volatility; wages (search for similar items in EconPapers)
JEL-codes: C23 D31 J31 (search for similar items in EconPapers)
Date: 2014
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