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Wage Mobility in Austria 1986-1996

  • Hofer, Helmut

    (Department of Economics and Finance, Institute for Advanced Studies)

  • Weber, Andrea

    (Department of Economics and Finance, Institute for Advanced Studies)

We examine wage mobility of Austrians, using 1986-1996 data from administrative sources. For the evaluation of wage mobility we calculate mobility measures based on transitions between quintiles in the wage distribution. A second group of indices measure wage mobility by the extent to which averaging wages over a longer period decreases cross sectional inequality. We find that mobility reduces wage inequality by 7 per cent over a six-year period. This equalising effect of wage mobility is only half as large as in other OECD countries. Considering an 11 year horizon for Austria implies a reduction of inequality of 10 per cent. Mobility is high only for young workers and for workers who changed their employer at least once during the observation period. Decomposing the sample into sex, age and worker-type groups and comparing within- and between-group mobility shows that most of the equalising effect of mobility occurs within the groups.

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File URL: http://www.ihs.ac.at/publications/eco/es-108.pdf
File Function: First version, 2001
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Paper provided by Institute for Advanced Studies in its series Economics Series with number 108.

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Length: 20 pages
Date of creation: Oct 2001
Date of revision:
Handle: RePEc:ihs:ihsesp:108
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  1. Rolf Aaberge & Anders Björklund & Markus Jäntti & Mårten Palme & Peder J. Pedersen & Nina Smith & Tom Wennemo, 1996. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," Discussion Papers 168, Research Department of Statistics Norway.
  2. repec:cup:cbooks:9780521590730 is not listed on IDEAS
  3. Moshe Buchinsky & Jennifer Hunt, 1999. "Wage Mobility In The United States," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 351-368, August.
  4. Machin, Stephen, 1996. "Wage Inequality in the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 12(1), pages 47-64, Spring.
  5. Geweke, John & Marshall, Robert C & Zarkin, Gary A, 1986. "Mobility Indices in Continuous Time Markov Chains," Econometrica, Econometric Society, vol. 54(6), pages 1407-23, November.
  6. repec:sae:niesru:v:166:y::i:1:p:87-96 is not listed on IDEAS
  7. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
  8. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  9. Michael F. Förster, 2000. "Trends and Driving Factors in Income Distribution and Poverty in the OECD Area," OECD Labour Market and Social Policy Occasional Papers 42, OECD Publishing.
  10. Helmut Hofer & Karl Pichelmann & Andreas-Ulrich Schuh, 2001. "Price and quantity adjustments in the Austrian labour market," Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 581-592.
  11. Fuess, Jr., Scott M. & Millea, Meghan, 2001. "Pay and Productivity in a Corporatist Economy: Evidence from Austria," IZA Discussion Papers 244, Institute for the Study of Labor (IZA).
  12. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
  13. Beblo, Miriam & Knaus, Thomas, 2000. "Measuring Income Inequality in Euroland," IRISS Working Paper Series 2000-10, IRISS at CEPS/INSTEAD.
  14. Frank Cowell & Christian Schluter, 1998. "Income mobility : a robust approach," LSE Research Online Documents on Economics 2210, London School of Economics and Political Science, LSE Library.
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