Wage Mobility in Central Europe: Patterns and Micro-level Drivers of Movements along the Wage Ladder

ABSTRACT

This paper provides analyses of the movements between wage levels in the four Central European (CE) countries in the periods 2008–2011 and 2011–2014. Based on longitudinal micro-data from the European Union Survey on Income and Living Conditions, it examines wage mobility in terms of transition matrices and three types of summary mobility indices. The results show that while the CE countries were quite homogeneous in this respect in the first period, the differences among them significantly increased in the second one. Multinomial logit models were employed to identify the determinants of wage mobility. The study reveals the effects of education, gender, occupation, type of contract, or work intensity in both periods.

KEYWORDS:

• Wage mobility
• intra-generational mobility
• relative mobility
• central europe
• eu-silc

JEL Classification:

• J01
• J30
• J39
• J60

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Supplementry material

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Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1. We thank the anonymous reviewer for this idea.

2. For example, unlike other Southern European countries, Portugal did not show high level of mobility.

3. Slovakia was not included in the analysis.

4. Low wages earners were defined as those with a wage below two-thirds of the national median hourly wage.

5. The longitudinal EU-SILC takes the form of a four-year rotational panel in which each subsequent year one quarter of the total sample is replaced by a new sub-sample of respondents.

6. Although the EU SILC questionnaire contains the question about hours worked in another job/other jobs, the comparative datasets we worked with do not contain such variable. We can only assume that if we had included this variable in the calculation of hourly wage, hourly wage would be smaller. It would be true in particular for low-earners who participate in multiple jobs more frequently.

7. For example, conclusions based on matrices are often robust with respect to the choice of income groups and neglect variations within income groups.

8. Dependent children are children aged 0–17 years and 18–24 years if inactive and living with at least one parent.

9. The bottom and top of the wage distribution represent specific cases in the transition matrices approach. Persons in the first decile cannot fall down and persons in the tenth decile cannot move up.

10. In particular, the prospects of persons in the seventh, eighth and ninth deciles improved.

11. International Standard Classification of Occupations refers to classification approved by the International Labor Organization, which organizes jobs into defined groups according to tasks and duties undertaken in the job.

12. The tenth decile represents an exception, as upward mobility from the decile is not possible.

13. The results of the robustness tests can be provided by authors on request.

14. Similar findings on the period prior to the global crisis do not exist for Slovakia and Hungary

Additional information

Funding

This work was supported by the Scientific Grant Agency VEGA [No. VEGA 2/0150/21]; Slovak Research and Development Agency [APVV-17-0329].