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Earnings Dynamics and Inequality in EU, 1994-2001

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  • Denisa Maria Sologon
  • Cathal O'Donoghue

Abstract

This paper uses ECHP for 14 EU countries to explore the dynamic structure of individual earnings and the extent to which changes in cross-sectional earnings inequality reflect transitory or permanent components of individual lifecycle earnings variation. Increases in inequality reflect increases in permanent differentials in four countries and increases in both components in two. Decreases in inequality reflect decreases in transitory differentials in four countries, in permanent differentials in two and in both components in rest. In general, increases in inequality are accompanied by decreases in mobility, whereas only in three countries the increase in mobility is determined by the decrease in inequality.

Suggested Citation

  • Denisa Maria Sologon & Cathal O'Donoghue, 2009. "Earnings Dynamics and Inequality in EU, 1994-2001," SOEPpapers on Multidisciplinary Panel Data Research 184, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp184
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    Cited by:

    1. Denisa Maria Sologon & Cathal O'Donoghue, 2014. "Shaping Earnings Insecurity: Labor Market Policy and Institutional Factors," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 205-232, May.
    2. Denisa Maria Sologon & O'Donoghue, Cathal, 2011. "Earnings Mobility in Europe: 1994-2001 : Do more flexible labour markets experience a higher earnings mobility?," MERIT Working Papers 2011-070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    3. Aedín Doris & Donal O’Neill & Olive Sweetman, 2013. "Identification of the covariance structure of earnings using the GMM estimator," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(3), pages 343-372, September.
    4. Denisa Maria Sologon & O'Donoghue, Cathal, 2011. "Shaping earnings instability: labour market policy and institutional factors," MERIT Working Papers 2011-077, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Sologon, Denisa Maria & O'Donoghue, Cathal, 2010. "Earnings Dynamics and Inequality among Men in Luxembourg, 1988-2004: Evidence from Administrative Data," IZA Discussion Papers 5014, Institute of Labor Economics (IZA).
    6. Frank A. Cowell & Philippe Kerm, 2015. "Wealth Inequality: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 671-710, September.

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    More about this item

    Keywords

    Panel data; wage distribution; inequality; mobility;
    All these keywords.

    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

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