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An International Comparison Of Lifetime Inequality: How Continental Europe Resembles North America

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  • Audra J. Bowlus
  • Jean-Marc Robin

Abstract

We compare earnings inequality and mobility across the U.S., Canada, France, Germany and the U.K. during the late 1990s. A flexible model of earnings dynamics that isolates positional mobility within a stable earnings distribution is estimated. Earnings trajectories are then simulated, and lifetime annuity value distributions are constructed. Earnings mobility and employment risk are found to be positively correlated with base-year inequality. Taken together they produce more equalization in countries with high cross-section inequality such that the countries in our sample have more similar lifetime inequality levels than crosssection measures suggest.
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  • Audra J. Bowlus & Jean-Marc Robin, 2012. "An International Comparison Of Lifetime Inequality: How Continental Europe Resembles North America," Journal of the European Economic Association, European Economic Association, vol. 10(6), pages 1236-1262, December.
  • Handle: RePEc:bla:jeurec:v:10:y:2012:i:6:p:1236-1262
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    2. Peter Levell & Jonathan Shaw, 2016. "Constructing Full Adult Life-cycles from Short Panels," International Journal of Microsimulation, International Microsimulation Association, vol. 9(2), pages 5-40.
    3. Giacomo Corneo, 2015. "Income inequality from a lifetime perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(2), pages 225-239, May.
    4. Garnero, Andrea & Hijzen, Alexander & Martin, Sébastien, 2019. "More unequal, but more mobile? Earnings inequality and mobility in OECD countries," Labour Economics, Elsevier, vol. 56(C), pages 26-35.
    5. Giesecke, Matthias & Bönke, Timm & Lüthen, Holger, 2011. "The Dynamics of Earnings in Germany: Evidence from Social Security Records," VfS Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48692, Verein für Socialpolitik / German Economic Association.
    6. Nam, Leanne, 2022. "Optimal Progressive Pension Systems in a Life-Cycle Model with Heterogeneity in Job Stability," VfS Annual Conference 2022 (Basel): Big Data in Economics 264015, Verein für Socialpolitik / German Economic Association.
    7. Peter Levell & Barra Roantree & Jonathan Shaw, 2021. "Mobility and the lifetime distributional impact of tax and transfer reforms," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 751-793, August.
    8. Bonin, Holger & Reuss, Karsten & Stichnoth, Holger, 2015. "Life-cycle incidence of family policy measures in Germany: Evidence from a dynamic microsimulation model," ZEW Discussion Papers 15-036, ZEW - Leibniz Centre for European Economic Research.
    9. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute of Labor Economics (IZA).
    10. Audra Bowlus & Émilien Gouin‐Bonenfant & Huju Liu & Lance Lochner & Youngmin Park, 2022. "Four decades of Canadian earnings inequality and dynamics across workers and firms," Quantitative Economics, Econometric Society, vol. 13(4), pages 1447-1491, November.
    11. van Dalen, H.P. & Henkens, K., 2015. "Why Demotion of Older Workers is a No-Go Area for Managers," Discussion Paper 2015-025, Tilburg University, Center for Economic Research.
    12. Magnac, Thierry & Roux, Sébastien, 2021. "Heterogeneity and wage inequalities over the life cycle," European Economic Review, Elsevier, vol. 134(C).
    13. Feld Lars P. & Schmidt Christoph M., 2016. "Jenseits der schrillen Töne," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 17(2), pages 188-205, July.
    14. Brant Abbott & Giovanni Gallipoli, 2017. "Human Capital Spillovers and the Geography of Intergenerational Mobility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 25, pages 208-233, April.
    15. Christian Schellhase & Torben Kuhlenkasper, 2017. "Semi-parametric estimation of income mobility with D‑vines using bivariate penalised splines," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 11(2), pages 107-134, October.
    16. Rocco ZIZZAMIA & Vimal RANCHHOD, 2020. "Earnings inequality over the life-course in South Africa," Working Paper 98ced6cc-3016-49dc-a2b6-b, Agence française de développement.
    17. Brant Abbott & Giovanni Gallipoli, 2014. "Technology and Intergenerational Persistence: Theory and Some Evidence," 2014 Meeting Papers 860, Society for Economic Dynamics.

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