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Earnings Mobility in Argentina, Mexico, and Venezuela: Testing the Divergence of Earnings and the Symmetry of Mobility Hypotheses

Author

Listed:
  • Fields, Gary S.

    (Cornell University)

  • Duval Hernández, Robert

    (Open University of Cyprus)

  • Freije-Rodriguez, Samuel

    (World Bank)

  • Sanchez Puerta, Maria Laura

    (World Bank)

Abstract

This paper examines changes in individual earnings during positive and negative growth periods in three Latin American economies: Argentina, Mexico, and Venezuela. We ask whether those individuals who start in the best economic position are those who experience the largest earnings gains or the smallest earnings losses; this is the “divergent mobility” hypothesis. We also compare periods of positive economic growth with those of negative economic growth, asking whether those groups of individuals that experience large positive earnings gains when the economy is growing are the same as those that experience large earnings losses when the economy is contracting; this is the “symmetry of mobility” hypothesis. We find very occasional support for the divergent mobility hypothesis in scattered years in the cases of Mexico and Venezuela, and no support at all in the case of Argentina. Rather, earnings mobility is most frequently convergent or neutral in all three countries. As for the symmetry of mobility hypothesis, we find that it is rejected in most cases; rather, those groups that gain the most when the economy is growing are also the ones that gain the most when the economy is contracting. Furthermore, we explain how the absence of divergence is compatible with rising inequality in the countries under study.

Suggested Citation

  • Fields, Gary S. & Duval Hernández, Robert & Freije-Rodriguez, Samuel & Sanchez Puerta, Maria Laura, 2007. "Earnings Mobility in Argentina, Mexico, and Venezuela: Testing the Divergence of Earnings and the Symmetry of Mobility Hypotheses," IZA Discussion Papers 3184, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp3184
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    References listed on IDEAS

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    1. Michael Carter & Christopher Barrett, 2006. "The economics of poverty traps and persistent poverty: An asset-based approach," Journal of Development Studies, Taylor & Francis Journals, vol. 42(2), pages 178-199.
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    Citations

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    Cited by:

    1. Viviane Azevedo & Cesar Bouillon, 2009. "Social Mobility in Latin America: A Review of Existing Evidence," Research Department Publications 4634, Inter-American Development Bank, Research Department.
    2. Prifti, Ervin & Estruch, Elisenda & Daidone, Silvio & Davis, Benjamin, 2019. "How much is too much: Does the size of income support transfers affect labor supply?," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 179-196.
    3. Walter Sosa-Escudero & Mariana Marchionni & Omar Arias, 2011. "Sources of Income Persistence: Evidence from Rural El Salvador," Journal of Income Distribution, Ad libros publications inc., vol. 20(1), pages 3-28, March.
    4. Fields, Gary S. & Sánchez Puerta, María Laura, 2010. "Earnings Mobility in Times of Growth and Decline: Argentina from 1996 to 2003," World Development, Elsevier, vol. 38(6), pages 870-880, June.
    5. Fields, Gary S., 2011. "Labor market analysis for developing countries," Labour Economics, Elsevier, vol. 18(S1), pages 16-22.
    6. Niny Khor & John Pencavel, 2006. "Income mobility of individuals in China and the United States," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(3), pages 417-458, July.
    7. Dang, Hai-Anh & Lanjouw, Peter & Luoto, Jill & McKenzie, David, 2014. "Using repeated cross-sections to explore movements into and out of poverty," Journal of Development Economics, Elsevier, vol. 107(C), pages 112-128.
    8. Lisa M. Dragoset & Gary S. Fields, 2006. "U.S. Earnings Mobility: Comparing Survey-Based and Administrative-Based Estimates," Working Papers 55, ECINEQ, Society for the Study of Economic Inequality.
    9. Perez, Victor, 2015. "Moving in and out of poverty in Mexico: What can we learn from pseudo-panel methods?," ISER Working Paper Series 2015-16, Institute for Social and Economic Research.

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    More about this item

    Keywords

    income convergence; earnings mobility; Latin America;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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