Earnings mobility and distribution: Comparing statistical models on Swedish data
AbstractThere are at least two instrumental motives for studying earnings mobility. First, to extend the analysis of income distribution to more than one time period. Second, to predict future individual earnings. For both these motives, adequate models of earnings mobility are needed. This study compares the usefulness of different statistical models (human capital and stochastic models), previously used to estimate earnings mobility, in predicting future individual earnings and earnings distributions. Special attention is given to the effect of considering individual heterogeneity. A 20- year panel, collected from the Swedish Level of Living Survey, of 651 employed men is used. The models are estimated on 17 periods and predictions are made for 3. It is found that a dynamic human capital model gives the best predictions of individual earnings.
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Bibliographic InfoArticle provided by Elsevier in its journal Labour Economics.
Volume (Year): 2 (1995)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/labeco
Other versions of this item:
- Palme, Mårten, 1994. "Earnings Mobility and Distribution: Comparing Statistical Models on Swedish Data," Working Paper Series in Economics and Finance 7, Stockholm School of Economics.
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
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