The effect of adverse labor market entry conditions on wage mobility: a transition matrix approach. (Job market paper)
Abstract:
We use Italian administrative data to study the effect of adverse labor market entry conditions on wage mobility of young males. We compare wage transition matrices between individuals who entered the labor market in the higher unemployment period 1986-1988 and those who entered in the lower unemployment period 1990-1992. We use a new nonparametric testing procedure in the context of conditional transition probabilities. We find that individuals who enter during the high unemployment period face a worse long run income mobility and in particular have significantly lower probabilities of reaching the top class of the wage distribution. We argue that Italy has a static labor market with a high cost of changing job. This reduces the opportunity of individuals to improve their working status, leading to a negative persistent effect of adverse entry conditions. (complementary material)
Abstract:
We use Italian administrative data to study the effect of adverse labor market entry conditions on wage mobility of young males. We compare wage transition matrices between individuals who entered the labor market in the higher unemployment period 1986-1988 and those who entered in the lower unemployment period 1990-1992. We use a new nonparametric testing procedure in the context of conditional transition probabilities. We find that individuals who enter during the high unemployment period face a worse long run income mobility and in particular have significantly lower probabilities of reaching the top class of the wage distribution. We argue that Italy has a static labor market with a high cost of changing job. This reduces the opportunity of individuals to improve their working status, leading to a negative persistent effect of adverse entry conditions. (complementary material)
Is Italian Income Mobility Regional? A nonparametric approach.
Abstract:
In this paper we compare short run income mobility between the North and South of Italy using the panel of the Survey on Household Income and Wealth for the period 2004-2008. We show that individuals from the South face a worse income dynamic than those from the North even when accounting for age and education. We develop a testing methodology introducing two tests, one-sided and two-sided, for comparing conditional transition probabilities with a continuous covariate. The tests are based on covariate matching techniques, do not assume any functional form for the dependence of the transition probability on the covariate and allow for different sample design. The two-sided test requires empirical processes techniques and is implemented by means of a multiplicative bootstrap while the one-sided test statistic has a pivotal distribution.
Abstract:
In this paper we compare short run income mobility between the North and South of Italy using the panel of the Survey on Household Income and Wealth for the period 2004-2008. We show that individuals from the South face a worse income dynamic than those from the North even when accounting for age and education. We develop a testing methodology introducing two tests, one-sided and two-sided, for comparing conditional transition probabilities with a continuous covariate. The tests are based on covariate matching techniques, do not assume any functional form for the dependence of the transition probability on the covariate and allow for different sample design. The two-sided test requires empirical processes techniques and is implemented by means of a multiplicative bootstrap while the one-sided test statistic has a pivotal distribution.