Earnings Mobility and Low-Wage Employment in Spain: The Role of Job Mobility and Contractual Arrangements

The aim of this paper can be summarized as follows. First, I analyze the dynamic nature of the relationship between earnings mobility, job mobility and changes in the contractual arrangements. Second I focus on the evolution of earnings mobility over time. And finally, I concentrate on lowwage employment and the opportunities of getting a better paid job for those workers at the bottom of the earnings distribution. For these purposes, I use the European Community Household Panel Survey (ECHP, 1995-2001), from which a sample of Spanish workers aged 16-65 years old has been drawn. Results show that overall job mobility contributes to increase earnings mobility. Movement into permanent employment status is associated with earnings upgrading overall. For males changes into temporary employment tend to be more strongly related with downgrading only when individuals remain with their current employer. The same is observed for females. However, for females, switching into temporary employment and changing employer at the same time tend to lead to either earnings upgrading or downgrading. Overall, earnings mobility remains mostly unchanged over time, although clear differences, both in terms of levels and trends, can be perceived among different types of workers. Finally I find evidence that switching into permanent employment, either with the current employer or with a change of employer, significantly increases the likelihood of getting a better paid job for those workers located at the bottom of the earnings distribution.