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Book part
Publication date: 23 August 2012

Denisa Maria Sologon and Cathal O’Donoghue

The economic reality of the 1990s in Europe forced the labor markets to become more flexible. Using a consistent comparative dataset for 14 countries, the European…

Abstract

The economic reality of the 1990s in Europe forced the labor markets to become more flexible. Using a consistent comparative dataset for 14 countries, the European Community Household Panel (ECHP), we explore the degree of earnings mobility and inequality across Europe, and the role of labor market institutions in understanding the cross-national differences in earnings mobility. We study the degree of rank mobility and the degree of mobility as equalizer of long-term earnings. The country ranking in long-term earnings inequality is similar with the country ranking in annual inequality, which is a sign of limited long-term equalizing mobility within countries with higher levels of annual inequality. In long-term earnings inequality, Denmark renders the most mobile earnings distribution with the second highest equalizing effect. The only disequalizing mobility in a lifetime perspective is found in Portugal. With respect to the relationship between earnings mobility and earnings inequality, we find a significant negative association both in the short and the long run. Based on the rankings in long-term Fields mobility and long-term inequality, Denmark is expected to have the lowest lifetime earnings inequality in Europe, followed by Finland, Austria, and Belgium. The Mediterranean countries (Spain and Portugal) are expected to have the highest long-term inequality. With respect to the institutional factors that may be related to earnings mobility, we bring evidence that the deregulation in the labor and product markets, the degree of unionization, the degree of corporatism and the spending on ALMPs are positively associated with earnings mobility.

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Inequality, Mobility and Segregation: Essays in Honor of Jacques Silber
Type: Book
ISBN: 978-1-78190-171-7

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Article
Publication date: 3 April 2018

Francieli Tonet Maciel and Ana Maria Hermeto C. Oliveira

The purpose of this paper is to discuss recent dynamics of the Brazilian labour market, by analysing occupational mobility patterns, specially the transitions between…

Abstract

Purpose

The purpose of this paper is to discuss recent dynamics of the Brazilian labour market, by analysing occupational mobility patterns, specially the transitions between formal and informal labour, and verify the earnings mobility resulting from these transitions, separately by gender.

Design/methodology/approach

The changes in the mobility patterns are analysed by performing an estimation of the transition probabilities between different occupational status between 2002 and 2012, using a multinomial logit model and the microdata from the Monthly Employment Survey (PME). The earnings mobility is analysed by using quantile regressions.

Findings

The results indicate a high degree of mobility from unemployment to formal employment in the period but suggest the persistence of mobility patterns. Women are better off in the period, but only among individuals with better attributes. The earnings mobility results, for women and men, suggest an increase in valuation of the formal labour relatively to informality (informal salaried employment and self-employment), especially at the bottom of the earnings distribution.

Originality/value

The paper contributes to a better understanding of recent changes in occupational mobility patterns between formal and informal labour and the earnings mobility underlying these patterns, accounting for the differences along the earnings distribution and gender issues. That is, it allows identify which groups of workers benefited more from the formalisation process to infer about trends in formal–informal dynamics over the period and discuss the challenges in conducting policies to promote inclusive and quality employment.

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International Journal of Development Issues, vol. 17 no. 1
Type: Research Article
ISSN: 1446-8956

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Book part
Publication date: 14 August 2015

Julia M. Schwenkenberg

This paper documents how gender differences in occupational status (defined by earnings, education, and returns to skills) have evolved over time and across generations…

Abstract

This paper documents how gender differences in occupational status (defined by earnings, education, and returns to skills) have evolved over time and across generations. The paper finds a persistent gender earnings gap, a reversal of the education gap, and a convergence in starting salaries and returns to experience. Divergent occupational choices might explain part of the persistent gender gaps and women’s failure to reach parity with men in the earnings distribution. Women choose more flexible jobs than men. But whereas men dominate women in high-powered occupations, they are also more likely to be in low-skilled low-pay occupations. Differential effects of children and time spent keeping house explain most of the gender gap in high-powered occupations but cannot explain fully why women choose more flexible occupations.

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Gender in the Labor Market
Type: Book
ISBN: 978-1-78560-141-5

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Article
Publication date: 1 February 1988

John Creedy and Keith Whitfield

Introduction The literature on earnings change has increasingly suggested that the key processes generating earnings inequality are those operating within the firm…

Abstract

Introduction The literature on earnings change has increasingly suggested that the key processes generating earnings inequality are those operating within the firm. However, there has been little empirical work on these phenomena, largely reflecting data deficiencies. Very few data‐sets on earnings contain information about internal processes and those which do often measure them narrowly. For example, most surveys of labour mobility define it either as movement between firms or as such movement plus major, once‐and‐for‐all changes of work type.

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International Journal of Manpower, vol. 9 no. 2
Type: Research Article
ISSN: 0143-7720

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Book part
Publication date: 27 August 2016

Rafael Novella, Laura Ripani, Agustina Suaya, Luis Tejerina and Claudia Vazquez

Using longitudinal datasets from Chile and Nicaragua, we compare intragenerational earnings mobility over a decade for two economies with similar inequality levels but…

Abstract

Using longitudinal datasets from Chile and Nicaragua, we compare intragenerational earnings mobility over a decade for two economies with similar inequality levels but divergent positions in equality of opportunities within the Latin American region. Our results suggest that earnings mobility, in terms of origin independence of individual ranking in the earnings distribution, is greater in Chile than in Nicaragua.

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Income Inequality Around the World
Type: Book
ISBN: 978-1-78560-943-5

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Article
Publication date: 27 August 2019

Ivan Privalko

The purpose of this paper is to compare internal and external job mobility (quits and promotions) as separate mechanisms for workers improving earnings and job fit.

Abstract

Purpose

The purpose of this paper is to compare internal and external job mobility (quits and promotions) as separate mechanisms for workers improving earnings and job fit.

Design/methodology/approach

The authors sample the core workforce from the British Household Panel Survey, estimating the effects of quits and promotions on two sets of outcomes. The first is subjective; satisfaction with work, pay and hours. The second is objective realities about the job; gross monthly pay and weekly working hours. The authors use linear fixed-effects estimation to control for individual heterogeneity.

Findings

Quits and promotions are distinctly different mechanisms for improving earnings and job fit. Quits improve measures of job fit (satisfaction with work, pay and hours) but have little effect on earnings. Internal promotions bring earnings growth but have little effect on job fit. The findings shed light what drives “voluntary” mobility; internal mobility may be driven by higher “reservation wages” and career progression, while external mobility may be driven by job matching and the need to find more appropriate work.

Social implications

Researchers should treat mobile labour markets with scepticism. The growth of “boundaryless careers” may closer resemble a release valve for poor working conditions in a varied market than a growth in new opportunities for earnings and career progression.

Originality/value

Studies of job mobility overwhelmingly focus on the effects quitting without explicitly comparing this mobility to promotions. This omission gives an incomplete picture of mobility. Bringing promotions back into the discussion, helps to understand why workers commit to internal careers and firm tenure. The paper shows that quits and promotions yield distinctly different outcomes for core workers, despite both mobility types being labelled “voluntary”. Thus, the authors show that inequality in earnings and working conditions is closely tied to access to the “life-chances” of mobility; those who are able to pursue promotion are rewarded objectively; those who quit for a new employer seek a better job fit.

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International Journal of Manpower, vol. 40 no. 7
Type: Research Article
ISSN: 0143-7720

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Article
Publication date: 1 February 1986

J. Creedy and K. Whitfield

Examining the process of job mobility and its effect on earnings, the authors find that this particular labour market is characterised by a high incidence of specific…

Abstract

Examining the process of job mobility and its effect on earnings, the authors find that this particular labour market is characterised by a high incidence of specific training, that upward mobility is largely experienced within the same organisation and is mainly of the osmotic type. It is felt that a technique must be devised to measure osmotic mobility accurately.

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Journal of Economic Studies, vol. 13 no. 2
Type: Research Article
ISSN: 0144-3585

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Book part
Publication date: 14 July 2006

Miles Corak

A cross-country comparison of generational earnings mobility is offered, and the reasons for the degree to which the long-run labour market success of children is related…

Abstract

A cross-country comparison of generational earnings mobility is offered, and the reasons for the degree to which the long-run labour market success of children is related to that of their parents is examined. The rich countries differ significantly in the extent to which parental economic status is related to the labour market success of children in adulthood. The strength of these associations should not be interpreted as offering a target or menu for the conduct of policy. A framework for understanding the underlying causal process as well as the conception of equality of opportunity is reviewed as a guide for public policy.

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Dynamics of Inequality and Poverty
Type: Book
ISBN: 978-0-76231-350-1

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Article
Publication date: 8 July 2014

Cassia Marchon

Most intergenerational mobility studies use data on two generations to estimate the elasticity between son's and father's earnings. The purpose of this paper is to use a…

Abstract

Purpose

Most intergenerational mobility studies use data on two generations to estimate the elasticity between son's and father's earnings. The purpose of this paper is to use a data set spanning three generations to estimate additional relationships between a person's earnings and family background yielded by intergenerational mobility models such as Becker-Tomes (1979) model and modified versions of it.

Design/methodology/approach

The paper uses data from the 1996 PNAD – a nationally representative household survey in Brazil. The author builds a data set consisting of 5,125 grandfather-father-son triplets by taking advantage of two characteristics of Brazil. First, commonly in Brazil, individuals live with their parents until they marry. Second, individuals tended to quit school and begin working at an early age. As a result, there are many households with adult sons who are not at the very beginning of their working careers. Since the sample is limited to households with adult sons, the author applies Heckman (1979) estimation procedure to address selection bias.

Findings

Estimation results contradict some predictions of simple versions of the Becker and Tomes model. The paper proposes a modified version of the Becker and Tomes model that allows for a skipping generation effect, and finds that family background explains 34.9 percent of the variation in earnings among males aged 16-27 in Brazil. If there were no differences in endowments (talent, IQ, health, physical appearance, attitudes toward work, family connections, etc.), the variation in earnings would fall by no less than 26 percent. If it were possible to eliminate differences in investment in human capital, the variation in earnings would fall by at most 21.1 percent.

Research limitations/implications

The paper has two main data limitations. First, the 1996 earnings of the fathers and sons are used as proxies for lifetime earnings although the transitory component of one-year earnings may be quite large, particularly at young ages. Second, in spite of the efforts to deal with the sample selection bias, the paper shows that the intergenerational elasticity in earnings for the sons aged 22-27 is about 14.6 percent lower for the subsample of households with adult sons than for the full sample.

Practical implications

The paper finds evidence supporting the existence of a direct effect of the grandparents on the grandchildren beyond their influence on the parents, and reinforces consideration of this factor in intergenerational mobility studies.

Social implications

The findings in this paper may suggest a room for improvements in economic outcomes of children in less privileged families through investment in formal education as well as policies that considers other aspects of a person's life. For instance, Bolsa Família – a Brazilian government program that provide cash allowances to poor families conditional on children school attendance – may improve the economic outcomes of poor children by enforcing formal education and by lessening the children hardships at home.

Originality/value

The paper proposes a modified version of the Becker and Tomes model which allows for a skipping generation effect. Under the assumptions of the modified model and in hand with a three-generations data set from Brazil, the paper estimates a lowerbound for the variation in earnings explained by differences in endowments across families, and an upperbound for the variation in earnings explained by differences in human capital.

Details

Journal of Economic Studies, vol. 41 no. 4
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 12 May 2021

Francesco Bloise, Maurizio Franzini and Michele Raitano

The authors analyse how the association between parental background and adult children's earnings changes when net rather than gross children's earnings are considered and…

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Abstract

Purpose

The authors analyse how the association between parental background and adult children's earnings changes when net rather than gross children's earnings are considered and disentangle what such changes depend on: differences between pre and after taxes earnings inequality or reranking of individuals along the earnings distribution before and after taxes.

Design/methodology/approach

Using data from European Union Statistics on Income and Living Conditions (EU-SILC) 2011, the authors focus on two large European countries, Italy and Poland, with comparable levels of inequality and background-related earnings premia but very different personal income tax (PIT) design and estimate – at both the mean and the deciles of the earnings distribution – the association between parents' characteristics and children's gross and net earnings.

Findings

The authors find that in Italy the PIT reduces the magnitude of the association between parental background and adult children's earnings at the top of the distribution, while no effects emerge for Poland, and the reduction is mostly due to a decrease in earnings inequality rather than to a re-ranking of children along the distribution. The findings are confirmed when the authors simulate the introduction of a “quasi flat tax” regime in Italy.

Social implications

The findings suggest that the higher the tax progressivity, the higher the background-related inequality reduction and the lower the intergenerational association, signalling that the degree of progressivity amongst children may be an effective weapon to reduce intergenerational inequality.

Originality/value

In the literature on intergenerational inequality, the role of taxes is usually overlooked. In this paper, the authors try to fill this gap and enquire how the PIT design affects the association between parental background and adult children's earnings.

Details

International Journal of Manpower, vol. 42 no. 8
Type: Research Article
ISSN: 0143-7720

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