Abstract: The recent economic crisis has highlighted and enhanced the long-term value of earnings over life. Obviously, this point is very important not only for social security benefits and pension reforms but also for population ageing, living standards, demographic conditions and long term fiscal sustainability. This paper is focused on the relationship between income and age for the case of Spain. Different econometric models and panel techniques are used to explain income over life. We have considered cohort data for different age groups over the years 2003 to 2010 using the information contained in the European Union Statistics on Income and Living Conditions (EU-SILC). We provide empirical evidence confirming that the variation of earnings with age follows a quadratic function, reaches a maximum at age 48 years old and declines thereafter. These results have important effects on retirement decisions and also confirm the existence of a significant gender gap. Furthermore, if we compare lifetime earnings with those obtained last decade, we can accept the existence of a new glass ceiling.

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