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Earnings dynamics and inequality in the EU, 1994-2001

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  • SOLOGON Denisa
  • O?DONOGHUE Cathal

Abstract

Relying on a consistent cross-national comparative data set ? ECHP, we explore the extent to which changes in cross-sectional earnings inequality in 14 EU countries over the period 1994 and 2001 reflect an increase in lifetime earnings inequality or in earnings instability. Equally weighted minimum distance methods are used to estimate the covariance structure of earnings and decompose earnings inequality into its permanent and transitory components. The increase in inequality reflects an increase in lifetime earnings inequality in four countries, and in earnings instability in two countries. Decreases in inequality reflect decreases in earnings instability in four countries, in lifetime inequality in two, and in both in rest.

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Bibliographic Info

Paper provided by CEPS/INSTEAD in its series CEPS/INSTEAD Working Paper Series with number 2010-34.

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Length: 44 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:irs:cepswp:2010-34

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Keywords: earnings; inequality earnings dynamics; permanent inequality; transitory inequality; minimum distance estimation;

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Cited by:
  1. Sologon, Denisa Maria & O'Donoghue, Cathal, 2010. "Earnings Dynamics and Inequality among Men in Luxembourg, 1988-2004: Evidence from Administrative Data," IZA Discussion Papers 5014, Institute for the Study of Labor (IZA).
  2. Denisa Maria Sologon & O'Donoghue, Cathal, 2011. "Earnings Mobility in Europe: 1994-2001 : Do more flexible labour markets experience a higher earnings mobility?," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Doris, Aedin & O'Neill, Donal & Sweetman, Olive, 2010. "Identification of the Covariance Structure of Earnings Using the GMM Estimator," IZA Discussion Papers 4952, Institute for the Study of Labor (IZA).
  4. Denisa Maria Sologon & O'Donoghue, Cathal, 2011. "Shaping earnings instability: labour market policy and institutional factors," MERIT Working Papers, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) 077, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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