DP3937 | Francs or Ranks? Earnings Mobility in France, 1967-1999

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This Paper uses a new data set drawn from official earnings records kept by the French national statistical agency, INSEE, and builds a time series on various mobility indices for the first time. Using six mobility concepts, we chart wage mobility trends for the working population and compare mobility rates in various population subgroups differentiated by gender, and education. We then compare mobility trends over time for each population subgroup. Next, we relate the extent of mobility using each of these concepts to measures of macroeconomic conditions including GNP growth, unemployment, inflation, and change in the minimum wage. The results show that the answers to even the most fundamental of mobility questions depend on the mobility concept used. Specifically, we find: over time, income mobility in France has risen for some concepts and fallen for others; comparing genders, women have higher income mobility for some concepts and lower income mobility for others; looking across educational groups, for some mobility concepts it is the best-educated workers who have the highest mobility, while for other concepts, it is the least-educated; in general, the indices are affected by demographic variables, macroeconomic conditions, and changes in employment composition, but these patterns are not uniform across the different concepts; changes in ranks track only imperfectly changes in francs, and the relationships are far from linear. The implication is that before labour economists ?do a mobility study,? they need to be very clear about the mobility concept or concepts they wish to study. As our work shows, the choice can and does make a vital difference.