Recent evidence on the impact of the crisis on developed countries shows that changes in income inequality and poverty have been relatively small in spite of the macroeconomic heterogeneity of the recession across different economies. However, when evaluating individual perceptions linked to the crisis any changes in the chances to scale up or lose ground in the income ladder are also crucial. Our aim in this paper is to analyze to what extent the recession has had an impact on individual equivalent incomes and, in particular, on the prevalence of downward mobility in two developed countries where job losses have been large. We find that income losses have increased, particularly in Spain, and while age and education are key determinants of the probability of experiencing an income loss in both countries, the presence of children only increases the probability of an income loss in Spain.
A previous version of this paper was presented at the X Summer School on Public Economics in Atlanta in July 2014, at the IARIW 33rd General Conference, Rotterdam, The Netherlands, in August 2014 and at the ISER (University of Essex, UK) Conference “Understanding changes in Income Inequality in the Austerity Period” in September 2014. Authors would like to thank assistants for their comments, Iryna Kyzyma for her excellent discussion and very useful suggestions at IARIW and Francesco Andreoli for his helpful comments to a previous version of the paper published in ECINEQ Working Papers. Authors acknowledge financial support from the Spanish Ministerio de Economía y Competitividad (Grants ECO2010-21668-C03-03/ECON and ECO2013-46516-C4-2-R) and from the Department of Economics (Universidad de Alcalá). The final version of this paper was written while Olga Cantó was Alcala-Santander Visiting Fellow at Lady Margaret Hall (University of Oxford), the author would like to thank the College and the University for the research facilities provided. EQUALITAS (www.equalitas.es) is a group of researchers interested in the analysis of inequality and poverty in a wide sense, thus including theoretical discussions of relevant measurement issues, empirical studies on income distribution in a variety of countries and the evaluation of social and labor market policies.
Cantó, O. and Ruiz, D. (2015), "The Contribution of Income Mobility to Economic Insecurity in the US and Spain during the Great Recession", Measurement of Poverty, Deprivation, and Economic Mobility (Research on Economic Inequality, Vol. 23), Emerald Group Publishing Limited, pp. 109-152. https://doi.org/10.1108/S1049-258520150000023004Download as .RIS
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