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Shaping Earnings Mobility: Policy and Institutional Factors

Author

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  • Denisa Maria Sologon
  • Cathal O’Donoghue

Abstract

This paper explores the role of labour market policy and institutional factors in explaining cross-national differences in earnings mobility across Europe in the 1990s using the European Community Household Panel and OECD data on institutional variables. More regulation in both labour and product markets emerge as sources of labour market rigidity, being positively associated with earnings immobility and exacerbating the adverse effects of macro-economic shocks on earnings mobility. Unionization is found to promote earnings mobility, effect, however, counteracted in periods with adverse macroeconomic shocks. Corporatism is found to promote mobility and to counteract the adverse effects of macroeconomic shocks on earnings mobility. The generosity of the unemployment benefit is found to limit the adverse effects of macroeconomic shocks on earnings mobility.

Suggested Citation

  • Denisa Maria Sologon & Cathal O’Donoghue, 2011. "Shaping Earnings Mobility: Policy and Institutional Factors," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 175-202, December.
  • Handle: RePEc:liu:liucej:v:8:y:2011:i:2:p:175-202
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    Cited by:

    1. Denisa Maria Sologon & O'Donoghue, Cathal, 2011. "Shaping earnings instability: labour market policy and institutional factors," MERIT Working Papers 077, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Aristei, David & Perugini, Cristiano, 2015. "The drivers of income mobility in Europe," Economic Systems, Elsevier, vol. 39(2), pages 197-224.

    More about this item

    Keywords

    Wage Distribution; Inequality; Earnings Mobility; Labour Market Institutions; Labour Market Policies;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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