Income mobility in Argentina

The paper analyses the variability of labour incomes in Argentina from mid-eighties to 2005. The magnitude of the income-instability phenomenon is estimated and its determinants are evaluated under different macroeconomic contexts. The document also analyses how income fluctuations have affected the inequality of income distribution. Finally, the income convergence hypothesis is explored. Data for Greater Buenos Aires will be used; this is Argentina’s main metropolitan area and home to nearly one third of the population. The analysis, covering the period 1988-2001 with panel data, will distinguish four periods that are relatively homogeneous in terms of a set of variables that are important for the aims pursued. The convergence hypothesis will be tested using dynamic pseudo-panel. One of the main results indicates that the growth in occupational instability registered since the mid-nineties led to a high variability in incomes despite the macroeconomic stability enjoyed throughout the nineties. In addition, a shift in the characteristics of income mobility was verified between the extremes of the period. Moreover, the panorama of growing inequality in the distribution of income is also appropriate to describe what happened with the changes in the distribution of more permanent incomes. Finally, the results obtained show scarce long-term income mobility in Argentina indicating that the income path does not converge to the general mean.