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Wage Mobility in Europe. A Comparative Analysis Using restricted Multinomial Logit Regression

  • Pavlopoulos, Dimitris
  • Muffels, Ruud
  • Vermunt, Jeroen-K.

In this paper, we investigate cross-country differences in wage mobility in Europe using the European Community Household Panel. The paper is particularly focused on examining the impact of economic conditions, welfare state regimes and employment regulation on wage mobility. We apply a log-linear approach that is very much similar to a restricted multinomial logit model and much more flexible than the standard probit approach. It appears that regime, economic conditions and employment regulation explain a substantial part of the cross-country variation. The findings also confirm the existence of an inverse U-shape pattern of wage mobility, showing a great deal of low and high-wage persistence in all countries.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 229.

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Date of creation: Oct 2005
Date of revision:
Handle: RePEc:pra:mprapa:229
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  1. Peter Gottschalk & Mary Joyce, 1997. "Cross-National Differences in the Rise in Earnings Inequality: Market and Institutional Factors," Boston College Working Papers in Economics 366, Boston College Department of Economics.
  2. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
  3. Cardoso, Ana Rute, 1998. "Earnings Inequality in Portugal: High and Rising?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(3), pages 325-43, September.
  4. Pavlopoulos, Dimitris & Muffels, Ruud & Vermunt, Jeroen-K., 2005. "Wage Mobility in Europe. A Comparative Analysis Using restricted Multinomial Logit Regression," MPRA Paper 229, University Library of Munich, Germany.
  5. 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.
  6. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  7. Aaberge, Rolf & Björklund, Anders & Jäntti, Markus & Palme, Mårten & Pedersen, Peder & Smith, Nina & Wennemo, Tom, 1996. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," SSE/EFI Working Paper Series in Economics and Finance 98, Stockholm School of Economics, revised Aug 2002.
  8. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August.
  9. Lorenzo Cappellari, 1999. "Low-Wage Mobility in the Italian Labour Market," The Warwick Economics Research Paper Series (TWERPS) 531, University of Warwick, Department of Economics.
  10. Dickens, Richard, 2000. "Caught in a Trap? Wage Mobility in Great Britain: 1975-1994," Economica, London School of Economics and Political Science, vol. 67(268), pages 477-97, November.
  11. E. Paul Durrenberger, 2005. "Labour," Chapters, in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar.
  12. Francine D. Blau & Lawrence M. Kahn, 1994. "International Differences in Male Wage Inequality: Institutions versus Market Forces," NBER Working Papers 4678, National Bureau of Economic Research, Inc.
  13. Markandya, Anil, 1982. "Intergenerational exchange mobility and economic welfare," European Economic Review, Elsevier, vol. 17(3), pages 307-324.
  14. Burkhauser, Richard V & Holtz-Eakin, Douglas & Rhody, Stephen E, 1997. "Labor Earnings Mobility and Inequality in the United States and Germany during the Growth Years of the 1980s," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(4), pages 775-94, November.
  15. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
  16. Cappellari, Lorenzo, 2002. " Do the 'Working Poor' Stay Poor? An Analysis of Low Pay Transitions in Italy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(2), pages 87-110, May.
  17. Muffels, Ruud & Fouarge, Didier, 2001. "Working Profiles and Employment Regimes in European Panel Perspective," MPRA Paper 13295, University Library of Munich, Germany.
  18. Bigard, A & Guillotin, Y & Lucifora, C, 1998. "Earnings Mobility: An International Comparison of Italy and France," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 535-54, December.
  19. Borjas, George J & Ramey, Valerie A, 1995. "Foreign Competition, Market Power, and Wage Inequality," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1075-1110, November.
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