Abstract
This paper analyses short-term intra-generational income mobility in France, Italy, Spain and the UK by exploiting the longitudinal component of EU-SILC for the periods 2005-2008 and 2012-2015. We investigate whether and to what extent the ability of households to move along the income distribution changed after the 2008 crisis and whether heterogeneities among countries exist. For this purpose, we employ mobility indexes and transition matrices as well as estimation of a 2SLS regression and of a dynamic ordered probit with random effects. Overall, indexes and transition matrices point to a decrease of mobility in the aftermath of the crisis. The econometric analyses suggest both the existence of a convergence process of incomes and state dependence of current and lagged income in both periods. We also observe sluggish income convergence and lower upward mobility in the second period. Among the microeconomic drivers, education and employment status are positive determinants of mobility. Finally, our results confirm cross-country heterogeneity.
Highlights
With this paper we wish to contribute to the literature by providing a full-fledged analysis of shortterm intra-generational income mobility before and after the crisis in selected European countries, as work analysing this aspect is limited
We estimate the probability that households move between quintiles of the income distribution from one year to the by using a dynamic ordered probit
We re-elaborate and summarise the information provided by the income matrices in Figure 1, where we report the percentage of individuals staying in the same quintile, moving upward or downward across quintiles
Summary
With this paper we wish to contribute to the literature by providing a full-fledged analysis of shortterm intra-generational income mobility before and after the crisis in selected European countries, as work analysing this aspect is limited To this end, we exploit the 4-year longitudinal samples of the European Union Survey of Income and Living Conditions (EU-SILC) for the time spans 2005-2008 and 2012-2015 and we focus on household-level data for four of the most relevant countries in Europe: France, Italy, Spain and the UK.. Mobility indexes and transition matrices only provide an aggregate overview of income changes and cannot account for the influence of individual and country-level characteristics that may affect income mobility For this reason, in the second part of this work, we move to the econometric analysis, which develops along two lines.
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