A longitudinal examination of earnings inequality and mobility among young, full-time workers in the United States

Abstract

This paper analyzes longitudinal data on earnings inequality and mobility for young, year-round full-time wage and salary workers in the United States. In general, we find that although real earnings across quintiles increased during the 1990s, earnings inequality continued to grow and upward earnings mobility declined slightly during the decade.

Notes

1 Year-round full-time workers are defined as those who have annual hours worked of at least 1750. The 1990 NLSY cohort is comprised of workers between the ages of 17 and 23. We also excluded full-time military personnel, those reporting work-limiting disabilities, self-employed individuals, and those enrolled in school.

2 Each year the NLSY determines a respondent's wage and salary income for the previous calendar year. Thus, our earnings data correspond to calendar years 1989–1997. Beginning in 1994 the NLSY is conducted every 2 years. Thus, we use 2-year income mobility rates, as opposed to 1-year rates. The sample sizes for each 2-year interval are as follows: 1990–92: 3119, 1992–94: 3338, 1994–96: 3424, 1996–98:3553.

3 A transition matrix summarizes the movements of workers across earnings quintiles over time. The 2-year earnings transition matrices, upon which the mobility calculations in Tables 1–3 are based, are available from the author upon request.