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The Economic Impact of Upward and Downward Occupational Mobility: A Comparison of Eight EU Member States

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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.

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  • Michele Raitano & Francesco Vona, 2010. "The Economic Impact of Upward and Downward Occupational Mobility: A Comparison of Eight EU Member States," Documents de Travail de l'OFCE 2010-29, Observatoire Francais des Conjonctures Economiques (OFCE).
  • Handle: RePEc:fce:doctra:1029
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    Cited by:

    1. Silvia Avram & Olga Canto, 2016. "Labour outcomes and family background: Evidence from the EU during the recession," Working Papers 414, ECINEQ, Society for the Study of Economic Inequality.
    2. Michele Raitano & Francesco Vona, 2015. "Measuring the link between intergenerational occupational mobility and earnings: evidence from eight European countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(1), pages 83-102, March.
    3. 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.
    4. 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.
    5. Michele Raitano & Claudia Vittori & Francesco Vona, 2015. "The effect of parental background along the son's earnings distribution : does one model fit for all ?," Documents de Travail de l'OFCE 2015-18, Observatoire Francais des Conjonctures Economiques (OFCE).
    6. Pastore, Francesco, 2017. "Why So Slow? The School-to-Work Transition in Italy," IZA Discussion Papers 10767, Institute for the Study of Labor (IZA).

    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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