Premium
Wage Inequality and Wage Mobility in E urope
Author(s) -
Bachmann Ronald,
Bechara Peggy,
Schaffner Sandra
Publication year - 2016
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12152
Subject(s) - unobservable , economics , wage , wage inequality , inequality , labour economics , wage share , distribution (mathematics) , efficiency wage , demographic economics , econometrics , mathematical analysis , mathematics
Using data from the E uropean U nion S tatistics on Income and Living Conditions, this paper investigates wage inequality and wage mobility in E urope. Decomposing inequality into within‐ and between‐group inequality, we analyze to what extent wage inequality and mobility can be explained by observable characteristics. Furthermore, we investigate which individual and household characteristics determine transitions within the wage distribution. We find that overall, mobility reduces wage inequality. While a large part of wage inequality is due to unobservable characteristics, the equalizing effect of mobility mainly occurs within groups. Furthermore, both personal and household characteristics play an important role for wage transitions. Finally, our findings reveal large cross‐country differences across E urope.