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More unequal, but more mobile?: Earnings inequality and mobility in OECD countries

Author

Listed:
  • Andrea Garnero

    (OECD)

  • Alexander Hijzen

    (OECD)

  • Sébastien Martin

    (OECD)

Abstract

This paper provides comprehensive cross-country evidence on the relationship between earnings inequality and intra-generational mobility by simulating individual earnings and employment trajectories in the long-term using short panel data for 24 OECD countries. On average across countries, about 25% of earnings inequality in a given year evens out over the life cycle as a result of mobility. Moreover, mobility is not systematically higher in countries with more earnings inequality in general. However, a positive and statistically significant relationship is found only in the bottom of the distribution. This reflects the role of mobility between employment and unemployment and not that of mobility up and down the earnings ladder. Ce document fournit une analyse approfondie de la relation entre l’inégalité des revenus d’activité et la mobilité intra-générationnelle en simulant les trajectoires professionnelles à l’aide de données de panel sur une courte période pour 24 pays de l’OCDE. En moyenne et pour l’ensemble des pays, environ 25% de l'inégalité des revenus observée une année donnée s’égalise au cours du cycle de vie du fait de la mobilité. De plus, la mobilité n’est pas systématiquement plus élevée dans les pays généralement plus inégalitaires en termes de revenus. Toutefois, on observe une relation positive et statistiquement significative entre inégalité et mobilité dans la partie inférieure de la distribution. Cela reflète le rôle de la mobilité entre emploi et chômage, et non celui de la mobilité ascendante et descendante sur l'échelle des salaires.

Suggested Citation

  • Andrea Garnero & Alexander Hijzen & Sébastien Martin, 2016. "More unequal, but more mobile?: Earnings inequality and mobility in OECD countries," OECD Social, Employment and Migration Working Papers 177, OECD Publishing.
  • Handle: RePEc:oec:elsaab:177-en
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    File URL: http://dx.doi.org/10.1787/5jm3p5m7ccr2-en
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    earnings-experience profiles; intra-generational mobility; life-time inequality; simulation;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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