moved in the reverse direction. For women, however, the change in earnings
mobility between 1987-88 and 1990-91 was weaker, but in the opposite
direction from men: a less than one percentage point rise in the probability of
moving up, a 1.5 point decline in the probability of moving down, and a
resulting 2.5 point increase in the net probability of moving up. The latter
probability did not change between 1990-91 and 1995-96, suggesting that the
cyclical earnings transition pattern for women is not clearly revealed by the
raw data.
Net Cyclical Effects in Earnings Mobility
Just as we earlier looked at how earnings interval shares show significant net
cyclical effects after controlling for underlying trends in the data, we now do
the same for the summary earnings mobility measures. This will allow a more
formal identification of underlying cyclical effects. In this case, the transition
probabilities are the dependent variables in a regression analysis (see Beach
and Finnie, 2001).
The unemployment responsiveness of the initial-year transition prob-
abilities is illustrated in Figure 3. Periods of high unemployment reduce
upward mobility over the lower earnings intervals for both men and women,
though more strongly for men than for women, again perhaps because of the
relatively greater concentration of males in the more cyclically sensitive
manufacturing and primary sectors of the economy, whereas females are
concentrated relatively more in the service and public sectors. More gen-
erally, weaker labour markets tend to reduce the degree of upward earnings
mobility for almost all regions of the earnings distribution for men. But for
women, earnings mobility increases over the middle and upper regions of the
earnings distribution, again because of the relatively stronger decline in overall
median earnings levels in recessions. Thus among men, the biggest (negative)
unemployment rate effects occur over the bottom three earnings intervals,
while among women they show up (positively) in the high and high-middle
regions of the earnings distribution.
Net cyclical effects on the summary mobility measures appear in Table 9.
Higher unemployment decreases net earnings mobility significantly for men
by reducing the probability of moving up the earnings distribution and
increasing the probability of moving down about equally, so that the average
net probability of moving up is significantly decreased. For every percentage
474
Charles M. Beach and Ross Finnie