Doctoral thesis

Relative wage mobility : A new semi-nonparametric estimation method


167 p

Thèse de doctorat: Università della Svizzera italiana, 2018

English The study of wage dynamics over time is more insightful than the analysis of point-in- time inequality measures. In policy-making, indeed, low wage careers instead of low- wage jobs should be at the center of the debate on long-term wage inequality. Many previous studies tried to estimate the degree of wage mobility within an economy; however, they rely on some quite restrictive assumptions. The aim of this thesis is to develop new copula model in order to describe more accurately the wage dynamics and its dependence on the initial position in the distribution and on some individual characteristics. We apply this functional copula model to US data. We find no sound empirical evidence of the existence of a “low-wage trap”. We then apply this model to British and German data, in order to verify whether the institutional setting has a relevant influence on wage mobility. We run separate estimates for the periods before and after the financial crisis that started in 2007, in order to assess whether the main drivers of relative wage mobility changed after the financial turmoil. We find that we mobility patterns significantly changed in Germany, but not in the UK, after the financial crisis, especially for young workers. In the third and last chapter of the thesis, we provide further empirical evidence on the importance of relative wage mobility as a driver of individual job satisfaction.
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