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Is the Millennial Generation Left Behind? Inter-Cohort Labour Income Inequality in a Context of Economic Shock

Author

Listed:
  • Marta Escalonilla

    (University of Oviedo)

  • Begoña Cueto

    (University of Oviedo)

  • María José Pérez-Villadóniga

    (University of Oviedo)

Abstract

This paper provides new evidence on how intergenerational income inequality evolves during the period 2005–2019. Using the Continuous Sample of Working Histories (CSWH), which includes administrative data about working lives and personal characteristics of Spanish workers, we shed light on the effect of the Great Recession on income inequality between cohorts in Spain. As a proxy of income, we employ monthly earnings data, provided by the CSWH. From a life course approach, we use two age-period-cohort (APC) models which allow us to separately identify three components: cohort, age and period effects. First, we examine relative earnings which will reveal whether there are income differences between generations. Second, we measure how absolute earnings have developed over time. Our results suggest that some generations are more disadvantaged in terms of income by their year of birth than others. Likewise, the evidence points out that the economic context experienced by a generation in their transition to the labour market is a key factor in the development of their income.

Suggested Citation

  • Marta Escalonilla & Begoña Cueto & María José Pérez-Villadóniga, 2022. "Is the Millennial Generation Left Behind? Inter-Cohort Labour Income Inequality in a Context of Economic Shock," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 285-321, November.
    • Handle: RePEc:spr:soinre:v:164:y:2022:i:1:d:10.1007_s11205-022-02958-x
    DOI: 10.1007/s11205-022-02958-x
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    More about this item

    Keywords

    Income inequality; The great recession; Cohort analysis; Age-period-cohort modelling; Young generations;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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