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Wage Mobility in Europe. A Comparative Analysis Using restricted Multinomial Logit Regression

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  • Pavlopoulos, Dimitris
  • Muffels, Ruud
  • Vermunt, Jeroen-K.

Abstract

In this paper, we investigate cross-country differences in wage mobility in Europe using the European Community Household Panel. The paper is particularly focused on examining the impact of economic conditions, welfare state regimes and employment regulation on wage mobility. We apply a log-linear approach that is very much similar to a restricted multinomial logit model and much more flexible than the standard probit approach. It appears that regime, economic conditions and employment regulation explain a substantial part of the cross-country variation. The findings also confirm the existence of an inverse U-shape pattern of wage mobility, showing a great deal of low and high-wage persistence in all countries.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 229.

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Date of creation: Oct 2005
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Handle: RePEc:pra:mprapa:229

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Keywords: wages; wage mobility; wage dynamics; multinomial logit regression; loglinear models; welfare states;

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References

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  1. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(3), pages 699-726, August.
  2. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, Elsevier, vol. 34(4), pages 851-879, June.
  3. Markandya, Anil, 1982. "Intergenerational exchange mobility and economic welfare," European Economic Review, Elsevier, Elsevier, vol. 17(3), pages 307-324.
  4. Peter Gottschalk & Mary Joyce, 1998. "Cross-National Differences In The Rise In Earnings Inequality: Market And Institutional Factors," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 489-502, November.
  5. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  6. Pavlopoulos, Dimitris & Muffels, Ruud & Vermunt, Jeroen-K., 2005. "Wage Mobility in Europe. A Comparative Analysis Using restricted Multinomial Logit Regression," MPRA Paper 229, University Library of Munich, Germany.
  7. Moshe Buchinsky & Jennifer Hunt, 1996. "Wage Mobility in the United States," NBER Working Papers 5455, National Bureau of Economic Research, Inc.
  8. Borjas, George J & Ramey, Valerie A, 1995. "Foreign Competition, Market Power, and Wage Inequality," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(4), pages 1075-1110, November.
  9. Rolf Aaberge & Anders Björklund & Markus Jäntti & Mårten Palme & Peder J. Pedersen & Nina Smith & Tom Wennemo, 1996. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," Discussion Papers, Research Department of Statistics Norway 168, Research Department of Statistics Norway.
  10. Francine D. Blau & Lawrence M. Kahn, 1994. "International Differences in Male Wage Inequality: Institutions versus Market Forces," NBER Working Papers 4678, National Bureau of Economic Research, Inc.
  11. Dickens, Richard, 2000. "Caught in a Trap? Wage Mobility in Great Britain: 1975-1994," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 67(268), pages 477-97, November.
  12. Daron Acemoglu, 2000. "Technical Change, Inequality, and the Labor Market," NBER Working Papers 7800, National Bureau of Economic Research, Inc.
  13. Cardoso, Ana Rute, 1998. "Earnings Inequality in Portugal: High and Rising?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(3), pages 325-43, September.
  14. Lorenzo Cappellari, 1999. "Low-Wage Mobility in the Italian Labour Market," The Warwick Economics Research Paper Series (TWERPS) 531, University of Warwick, Department of Economics.
  15. repec:cup:cbooks:9780521593861 is not listed on IDEAS
  16. Muffels, Ruud & Fouarge, Didier, 2001. "Working Profiles and Employment Regimes in European Panel Perspective," MPRA Paper 13295, University Library of Munich, Germany.
  17. Richard V. Burkhauser & Douglas Holtz-Eakin & Stephen E. Rhody, 1997. "Labor Earnings Mobility and Inequality in the United States and Germany During the Growth Years of the 1980s," NBER Working Papers 5988, National Bureau of Economic Research, Inc.
  18. Bigard, A & Guillotin, Y & Lucifora, C, 1998. "Earnings Mobility: An International Comparison of Italy and France," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 535-54, December.
  19. Cappellari, Lorenzo, 2002. " Do the 'Working Poor' Stay Poor? An Analysis of Low Pay Transitions in Italy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(2), pages 87-110, May.
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Citations

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Cited by:
  1. Magda, Iga & Bukowski, Maciej & Buchholz, Sonia & Lewandowski, Piotr & Chrostek, Paweł & Kamińska, Agnieszka & Lis, Maciej & Potoczna, Monika & Myck, Michał & Kundera, Michał & Oczkowska, Monika, 2013. "Employment in Poland 2011 - Poverty and jobs," MPRA Paper 50185, University Library of Munich, Germany.
  2. repec:ese:iserwp:2008-10 is not listed on IDEAS
  3. Pavlopoulos, Dimitris & Muffels, Ruud & Vermunt, Jeroen-K., 2005. "Wage Mobility in Europe. A Comparative Analysis Using restricted Multinomial Logit Regression," MPRA Paper 229, University Library of Munich, Germany.
  4. Corrado Zoppi & Sabrina Lai, 2011. "Differentials in the Regional Operational Program expenditure for public services and infrastructure in the coastal cities of Sardinia (Italy) analyzed in the ruling context of the Regional Landscape ," ERSA conference papers ersa10p713, European Regional Science Association.

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