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The economic impact of upward and downward occupational mobility: A comparison of eight EU member states

Author

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  • Michele Raitano
  • Francesco Vona

    () (Sapienza University of Rome.)

Abstract

Recent literature agrees that the degree of intergenerational mobility substantially differs across European countries, ranked between the “mobile” Nordic countries and the “immobile” Anglo-Saxon and Southern ones. In this paper we will compare the intergenerational transmission of advantages in 8 European countries using EU-SILC dataset. Considering parental occupations as background variable, our main aims are to assess whether residual returns to background on offspring’s labour incomes persist after controlling for intermediated background-related outcomes (education and occupation) and to disentangle the role played by upward and downward occupational mobility on earnings. Our empirical analyses show that cross-country differences occur in the labour markets rather than in the educational stream. Consistently with previous findings, residual background effects on earnings are not significant in Nordic and Continental countries whereas they appear large in Anglo-Saxon and Southern ones. When the impact of backward and upward mobility is assessed, in all countries but Nordic ones penalties for upgrading emerge mostly in top occupations and are higher in less-mobile countries. These patterns are smoothened but preserved in bottom occupations and robust to different labour income measures.

Suggested Citation

  • Michele Raitano & Francesco Vona, 2011. "The economic impact of upward and downward occupational mobility: A comparison of eight EU member states," Working Papers 13, Doctoral School of Economics, Sapienza University of Rome, revised 2011.
  • Handle: RePEc:dsc:wpaper:13
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    File URL: http://phdschool-economics.dse.uniroma1.it/website/workingpapers/raitano_vonaWP13.pdf
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    References listed on IDEAS

    as
    1. Anders Björklund & Mikael Lindahl & Erik Plug, 2006. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," The Quarterly Journal of Economics, Oxford University Press, vol. 121(3), pages 999-1028.
    2. Miles Corak & Andrew Heisz, 1998. "The Intergenerational Earnings and Income Mobility of Canadian," Labor and Demography 9808001, EconWPA.
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    Cited by:

    1. Ada Ferrer-i-carbonell & X. Ramos & M. Oviedo, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Spain," GINI Country Reports spain, AIAS, Amsterdam Institute for Advanced Labour Studies.
    2. Ashok Thomas & Luca Spataro, 2015. "Financial Literacy, Human Capital and Stock Market Participation in Europe: An Empirical Exercise under Endogenous Framework," Discussion Papers 2015/194, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

    More about this item

    Keywords

    Residual Returns to Background; Earning Impact of Occupational Mobility; International comparison; Intergenerational Inequality;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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