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More unequal, but more mobile? Earnings inequality and mobility in OECD countries

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  • Garnero, Andrea
  • Hijzen, Alexander
  • Martin, Sébastien

Abstract

This paper provides comprehensive cross-country evidence on the relationship between earnings inequality and intra-generational mobility by simulating individual earnings and employment trajectories using short panels for 24 OECD countries. On average across countries, only 20% of earnings inequality in a given year evens out over the life cycle as a result of mobility. This suggests that the bulk of earnings inequality at a given time is permanent. Moreover, mobility and inequality are positively correlated across countries, suggesting that international differences in life-time inequality tend to be less pronounced than inequality differences in a given year. The positive correlation is largely driven by employment mobility – movements between employment and unemployment – and most pronounced in the bottom of the distribution.

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  • 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.
  • Handle: RePEc:eee:labeco:v:56:y:2019:i:c:p:26-35
    DOI: 10.1016/j.labeco.2018.08.005
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. More Unequal, But More Mobile? Earnings Inequality and Mobility in OECD Countries
      by maximorossi in NEP-LTV blog on 2016-04-07 18:38:50

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    Cited by:

    1. 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.
    2. Lucas Chancel, 2019. "Ten facts about income inequality in advanced economies," World Inequality Lab Working Papers hal-02876982, HAL.
    3. Pullman, Ashley & Gauly, Britta & Lechner, Clemens M., 2021. "Short-term earnings mobility in the Canadian and German context: the role of cognitive skills," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55(55), pages 1-.10.
    4. Chiara Criscuolo & Alexander Hijzen & Cyrille Schwellnus & Erling Barth & Wen-Hao Chen & Richard Fabling & Priscilla Fialho & Balazs Stadler & Richard Upward & Wouter Zwysen & Katarzyna Grabska-Romago, 2020. "Workforce composition, productivity and pay: the role of firms in wage inequality," OECD Economics Department Working Papers 1603, OECD Publishing.
    5. Yang, Xiaoliang & Zhou, Peng, 2022. "Wealth inequality and social mobility: A simulation-based modelling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 307-329.
    6. repec:iab:iabjlr:v:55:i::p:art.10 is not listed on IDEAS
    7. Dean R. Lillard, 2021. "Cross‐National Research: Realised and Potential Contributions," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 542-553, December.
    8. Ashley Pullman & Britta Gauly & Clemens M. Lechner, 2021. "Short-term earnings mobility in the Canadian and German context: the role of cognitive skills," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-19, December.
    9. Birgitta Jansson, 2021. "Income inequality and intragenerational income mobility in Sweden from 1983 to 2010: Following two birth cohorts," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 751-773, December.
    10. Pullman, Ashley & Gauly, Britta & Lechner, Clemens M., 2021. "Short-term earnings mobility in the Canadian and German context: the role of cognitive skills," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-10.
    11. Zbigniew Mogila & Patricia C. Melo & José M. Gaspar, 2020. "Exploring the relation between income mobility and inequality at the regional level using EU-SILC microdata," Working Papers REM 2020/0134, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

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    More about this item

    Keywords

    Intra-generational mobility; Life-time inequality; Earnings-experience profiles; Simulation;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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