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Regional differences in initial labour market conditions and dynamics in lifetime income trajectories
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Statistics.ORCID iD: 0000-0003-1558-032X
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Statistics.ORCID iD: 0000-0003-3187-1987
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE).
2022 (English)In: Longitudinal and Life Course Studies, E-ISSN 1757-9597, Vol. 13, no 3, p. 352-379Article in journal (Refereed) Published
Abstract [en]

We use longitudinal register data from Sweden to study patterns and dynamics in lifetime income trajectories. We examine divergences in these income trajectories by local economic conditions at labour market entry, in combination with other factors such as gender, education level and socio-economic background. We cannot assume that these relationships are constant over the course of individuals’ working lives. Therefore, we use methods from functional data analysis, allowing for a time-varying relationship between income and the explanatory variables. Our results show a large degree of heterogeneity in how lifetime income trajectories develop for different subgroups. We find that, for men, entering the labour market in an urban area is associated with higher cumulative lifetime income, especially later in life. The exception is men with only primary education, for whom those starting their working lives in a large city have lower incomes on average. This divergence increases in size over time. Women who enter into a large urban labour market receive higher lifetime income at all education levels. This relationship is strongest for women with primary education but decreases in strength over time for these women.

Place, publisher, year, edition, pages
Bristol University Press , 2022. Vol. 13, no 3, p. 352-379
Keywords [en]
functional data analysis, lifetime income, local labour market, longitudinal data, urbanisation
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-198263DOI: 10.1332/175795921X16427665823284ISI: 000841657200002PubMedID: 35920642Scopus ID: 2-s2.0-85134214474OAI: oai:DiVA.org:umu-198263DiVA, id: diva2:1685355
Available from: 2022-08-02 Created: 2022-08-02 Last updated: 2024-01-23Bibliographically approved
In thesis
1. Studying earnings trajectories as functional outcomes
Open this publication in new window or tab >>Studying earnings trajectories as functional outcomes
2024 (English)Doctoral thesis, comprehensive summary (Other academic)
Alternative title[sv]
Att studera inkomstbanor som funktionella utfall
Abstract [en]

In this thesis, we present methods for studying patterns of income accumulation over time using functional data analysis. This is made possible by the availability of large-scale longitudinal register data in Sweden. By modelling individuals’ cumulative earnings trajectories as continuous functions of time, we can explore temporal dynamics as well as divergences in these trajectories based on initial labour market conditions. A major contribution of this thesis consists of extending the potential outcome framework for causal inference to functional data analysis.

In Paper I, we use functional-on-scalar linear regression and an interval-wise testing procedure to study the associations between initial labour market size and income trajectories for one Swedish birth cohort. In Paper II, we present methods to draw causal conclusions in this setting. We introduce the functional average treatment effect (FATE), as well as an outcome-regression based estimator for this parameter. In addition, we show the finite sample distribution of this estimator under certain regularity conditions and demonstrate how simultaneous confidence bands can be used for inferences about the FATE. An application study in this paper estimates the causal effect of initial labour market size on income accumulation trajectories.

In Paper III, these methods are applied to study the effect of initial firm age on earnings accumulation. Paper IV presents an outcome regression based and a double robust estimator for the mean of functional outcomes when some of these outcome functions are missing at random. We derive the asymptotic distributions of these two estimators as well as their covariance structure under more general conditions. 

Place, publisher, year, edition, pages
Umeå: Umeå University, 2024. p. 26
Series
Statistical studies, ISSN 1100-8989 ; 58
Keywords
functional data analysis, causal inference, earnings trajectories, simultaneous confidence bands, missing data
National Category
Probability Theory and Statistics
Research subject
Statistics
Identifiers
urn:nbn:se:umu:diva-217510 (URN)9789180702348 (ISBN)9789180702355 (ISBN)
Public defence
2024-02-09, HUM.D.220, Humanisthuset, Umeå, 10:00 (English)
Opponent
Supervisors
Available from: 2024-01-19 Created: 2024-01-11 Last updated: 2024-01-11Bibliographically approved

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Ecker, Kreskede Luna, XavierWesterlund, Olle

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