1887

OECD Social, Employment and Migration Working Papers

This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language - English or French - with a summary in the other.

English, French

More unequal, but more mobile?

Earnings inequality and mobility in OECD countries

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.

English

Keywords: simulation, life-time inequality, earnings-experience profiles, intra-generational mobility
JEL: O57: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Comparative Studies of Countries; J30: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wages, Compensation, and Labor Costs: General; J62: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Job, Occupational, and Intergenerational Mobility; Promotion; E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
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