IDEAS home Printed from https://ideas.repec.org/a/bla/intlab/v158y2019i1p83-113.html
   My bibliography  Save this article

Youth earnings and labour market volatility in Europe

Author

Listed:
  • Sara AYLLÓN
  • Xavier RAMOS

Abstract

The authors provide new evidence on youth earnings and labour market volatility, including flows into and out of employment, across Europe during the Great Recession. EU‐SILC data for the period 2004–13 reveal large disparities in volatility levels and trends across European countries. As expected, the Great Recession increased youth labour market volatility, offsetting the trends observed over the previous years of economic prosperity. A variance decomposition exercise points to greater exposure to worker turnover in southern Europe. Fixed effects regression on labour market institutions relates higher unemployment benefits and more stringent employment protection legislation to lower earnings and labour market volatility.

Suggested Citation

  • Sara AYLLÓN & Xavier RAMOS, 2019. "Youth earnings and labour market volatility in Europe," International Labour Review, International Labour Organization, vol. 158(1), pages 83-113, March.
    • Handle: RePEc:bla:intlab:v:158:y:2019:i:1:p:83-113
    DOI: 10.1111/ilr.12131
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ilr.12131
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ilr.12131?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Emilia Bono & Andrea Weber & Rudolf Winter-Ebmer, 2015. "Fertility and economic instability: the role of unemployment and job displacement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(2), pages 463-478, April.
    2. Cappellari, Lorenzo & Jenkins, Stephen P., 2014. "Earnings and labour market volatility in Britain, with a transatlantic comparison," Labour Economics, Elsevier, vol. 30(C), pages 201-211.
    3. Lorenzo Cappellari & Marco Leonardi, 2016. "Earnings Instability and Tenure," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(2), pages 202-234, April.
    4. Emilia Del Bono & Andrea Weber & Rudolf Winter-Ebmer, 2012. "Clash Of Career And Family: Fertility Decisions After Job Displacement," Journal of the European Economic Association, European Economic Association, vol. 10(4), pages 659-683, August.
    5. Ziliak, James P. & Hardy, Bradley & Bollinger, Christopher, 2011. "Earnings volatility in America: Evidence from matched CPS," Labour Economics, Elsevier, vol. 18(6), pages 742-754.
    6. Sascha Becker & Samuel Bentolila & Ana Fernandes & Andrea Ichino, 2010. "Youth emancipation and perceived job insecurity of parents and children," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 1047-1071, June.
    7. Konstantinos Tatsiramos & Jan C. Ours, 2014. "Labor Market Effects Of Unemployment Insurance Design," Journal of Economic Surveys, Wiley Blackwell, vol. 28(2), pages 284-311, April.
    8. David Card & Jochen Kluve & Andrea Weber, 2010. "Active Labour Market Policy Evaluations: A Meta-Analysis," Economic Journal, Royal Economic Society, vol. 120(548), pages 452-477, November.
    9. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
    10. Caliendo, Marco & Künn, Steffen & Schmidl, Ricarda, 2011. "Fighting Youth Unemployment: The Effects of Active Labor Market Policies," IZA Discussion Papers 6222, Institute of Labor Economics (IZA).
    11. Pierre Brochu & David A. Green, 2013. "The Impact of Minimum Wages on Labour Market Transitions," Economic Journal, Royal Economic Society, vol. 123(12), pages 1203-1235, December.
    12. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
    13. Denisa Maria Sologon & Cathal O'Donoghue, 2014. "Shaping Earnings Insecurity: Labor Market Policy and Institutional Factors," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 205-232, May.
    14. Holmlund, Bertil, 2014. "What do labor market institutions do?," Labour Economics, Elsevier, vol. 30(C), pages 62-69.
    15. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992. "Earnings uncertainty and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 30(2), pages 307-337, November.
    16. Olivier J. Blanchard & Jean Tirole, 2008. "The Joint Design of Unemployment Insurance and Employment Protection: A First Pass," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 45-77, March.
    17. Danielle Venn, 2011. "Earnings Volatility and its Consequences for Households," OECD Social, Employment and Migration Working Papers 125, OECD Publishing.
    18. Flavio Cunha & James Heckman & Salvador Navarro, 2005. "Separating uncertainty from heterogeneity in life cycle earnings," Oxford Economic Papers, Oxford University Press, vol. 57(2), pages 191-261, April.
    19. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
    20. Kodde, David A, 1986. "Uncertainty and the Demand for Education," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 460-467, August.
    21. Eve Caroli & Mathilde Godard, 2016. "Does job insecurity deteriorate health?," Health Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 131-147, February.
    22. Pedro Portugal & Ana Rute Cardoso, 2006. "Disentangling the Minimum Wage Puzzle: An Analysis of Worker Accessions and Separations," Journal of the European Economic Association, MIT Press, vol. 4(5), pages 988-1013, September.
    23. Lynn, Peter & Iacovou, Maria, 2013. "Implications of the EU-SILC following rules, and their implementation, for longitudinal analysis," ISER Working Paper Series 2013-17, Institute for Social and Economic Research.
    24. Sara Rica & Amaia Iza, 2005. "Career Planning in Spain: Do Fixed-term Contracts Delay Marriage and Parenthood?," Review of Economics of the Household, Springer, vol. 3(1), pages 49-73, November.
    25. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
    26. David H. Autor & Alan Manning & Christopher L. Smith, 2016. "The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment," American Economic Journal: Applied Economics, American Economic Association, vol. 8(1), pages 58-99, January.
    27. repec:bla:revinw:v:60:y:2014:i::p:s205-s232 is not listed on IDEAS
    28. Acemoglu, Daron & Shimer, Robert, 2000. "Productivity gains from unemployment insurance," European Economic Review, Elsevier, vol. 44(7), pages 1195-1224, June.
    29. Shin, Donggyun & Solon, Gary, 2011. "Trends in men's earnings volatility: What does the Panel Study of Income Dynamics show?," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 973-982, August.
    30. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-979, July.
    31. Daly, Mary C. & Valletta, Robert G., 2008. "Cross-national trends in earnings inequality and instability," Economics Letters, Elsevier, vol. 99(2), pages 215-219, May.
    32. Richard B. Freeman, 1980. "The Exit-Voice Tradeoff in the Labor Market: Unionism, Job Tenure, Quits," NBER Working Papers 0242, National Bureau of Economic Research, Inc.
    33. repec:hal:pseose:halshs-01311366 is not listed on IDEAS
    34. Carlos Garcia‐Serrano & Miguel A. Malo, 2002. "Worker Turnover, Job Turnover and Collective Bargaining in Spain," British Journal of Industrial Relations, London School of Economics, vol. 40(1), pages 69-85, March.
    35. Dynan Karen & Elmendorf Douglas & Sichel Daniel, 2012. "The Evolution of Household Income Volatility," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(2), pages 1-42, December.
    36. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-1187, December.
    37. Valerie Antcliff & Richard Saundry, 2009. "Accompaniment, Workplace Representation and Disciplinary Outcomes in British Workplaces — Just a Formality?," British Journal of Industrial Relations, London School of Economics, vol. 47(1), pages 100-121, March.
    38. Bertil Holmlund, 1998. "Unemployment Insurance in Theory and Practice," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(1), pages 113-141, March.
    39. Medoff, James L, 1979. "Layoffs and Alternatives under Trade Unions in U.S. Manufacturing," American Economic Review, American Economic Association, vol. 69(3), pages 380-395, June.
    40. Richard Breen & Pasi Moisio, 2004. "Poverty dynamics corrected for measurement error," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 2(3), pages 171-191, July.
    41. Meghir, Costas & Pistaferri, Luigi, 2011. "Earnings, Consumption and Life Cycle Choices," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 9, pages 773-854, Elsevier.
    42. Lucifora, Claudio, 1998. "The impact of unions on labour turnover in Italy:: Evidence from establishment level data," International Journal of Industrial Organization, Elsevier, vol. 16(3), pages 353-376, May.
    43. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    44. Christian Dustmann & Uta Schönberg, 2009. "Training and Union Wages," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 363-376, May.
    45. Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 261-291, April.
    46. Snow, Arthur & Warren, Ronald S, Jr, 1990. "Human Capital Investment and Labor Supply under Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(1), pages 195-206, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emelie Hane-Weijman & Rikard H. Eriksson & David Rigby, 2020. "How do occupational relatedness and complexity condition employment dynamics in periods of growth and recession?," Papers in Evolutionary Economic Geography (PEEG) 2011, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2020.
    2. Piróg Danuta & Hibszer Adam, 2023. "Which Skills are the Most Prized? Analysing Monetary Value of Geographers’ Skills on the Labour Market in Six European Countries," Quaestiones Geographicae, Sciendo, vol. 42(4), pages 63-79, December.
    3. Albena Vutsova & Martina Arabadzhieva, 2022. "Three Eastern Cases of Youth Unemployment Trends – Bulgaria, Romania, Serbia," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 94-110.
    4. Sonja BEKKER & Ioana POP, 2020. "Photographs of young generations on the Dutch labour market," International Labour Review, International Labour Organization, vol. 159(2), pages 195-215, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cappellari, Lorenzo & Jenkins, Stephen P., 2014. "Earnings and labour market volatility in Britain, with a transatlantic comparison," Labour Economics, Elsevier, vol. 30(C), pages 201-211.
    2. Cappellari, Lorenzo & Jenkins, Stephen P., 2014. "Earnings and labour market volatility in Britain, with a transatlantic comparison," Labour Economics, Elsevier, vol. 30(C), pages 201-211.
    3. Sara Ayllón & Natalia Nollenberger, 2021. "The Unequal Opportunity For Skills Acquisition During The Great Recession In Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 289-316, June.
    4. P. Jenkins, Stephen & Jäntti, Markus, 2013. "Income mobility," ISER Working Paper Series 2013-23, Institute for Social and Economic Research.
    5. Silvia Avram & Mike Brewer & Paul Fisher & Laura Fumagalli, 2022. "Household Earnings and Income Volatility in the UK, 2009–2017," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(2), pages 345-369, June.
    6. Robert Moffitt & Sisi Zhang, 2018. "The PSID and Income Volatility: Its Record of Seminal Research and Some New Findings," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 48-81, November.
    7. Stephen P. Jenkins, 2011. "Has the Instability of Personal Incomes been Increasing?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 218(1), pages 33-43, October.
    8. Goerke, Laszlo & Pannenberg, Markus, 2011. "Trade union membership and dismissals," Labour Economics, Elsevier, vol. 18(6), pages 810-821.
    9. Rohde, Nicholas & Tang, Kam Ki & D’Ambrosio, Conchita & Osberg, Lars & Rao, Prasada, 2020. "Welfare-based income insecurity in the us and germany: evidence from harmonized panel data," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 226-243.
    10. Timothy M. Smeeding, 2018. "The PSID in Research and Policy," The ANNALS of the American Academy of Political and Social Science, , vol. 680(1), pages 29-47, November.
    11. Nieto, Adrián, 2022. "Can subsidies to permanent employment change fertility decisions?," Labour Economics, Elsevier, vol. 78(C).
    12. Cappellari, Lorenzo & Jenkins, Stephen P., 2013. "Earnings and Labour Market Volatility in Britain," IZA Discussion Papers 7491, Institute of Labor Economics (IZA).
    13. Robert Moffitt & Sisi Zhang, 2018. "Income Volatility and the PSID: Past Research and New Results," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 277-280, May.
    14. Robert Moffitt & John Abowd & Christopher Bollinger & Michael Carr & Charles Hokayem & Kevin McKinney & Emily Wiemers & Sisi Zhang & James Ziliak, 2022. "Reconciling Trends in U.S. Male Earnings Volatility: Results from Survey and Administrative Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(1), pages 1-11, December.
    15. Thomas Davoine & Christian Keuschnigg, 2015. "Flexicurity, Taxes and Job Reallocation," CESifo Working Paper Series 5302, CESifo.
    16. Eric J. Bartelsman & Pieter A. Gautier & Joris De Wind, 2016. "Employment Protection, Technology Choice, And Worker Allocation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(3), pages 787-826, August.
    17. Marco Leonardi, 2017. "Job Mobility And Earnings Instability," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 260-280, January.
    18. Bell, David N.F. & Hart, Robert A., 2010. "Retire Later or Work Harder?," IZA Discussion Papers 4720, Institute of Labor Economics (IZA).
    19. Christian Keuschnigg & Thomas Davoine, 2010. "Flexicurity and Job Reallocation," University of St. Gallen Department of Economics working paper series 2010 2010-11, Department of Economics, University of St. Gallen.
    20. Jaerim Choi & Ivan Rivadeneyra & Kenia Ramirez, 2021. "Labor Market Effects of a Minimum Wage: Evidence from Ecuadorian Monthly Administrative Data," CESifo Working Paper Series 8987, CESifo.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:intlab:v:158:y:2019:i:1:p:83-113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ilounch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.