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What Accounts For the Rise in Wage Inequality in Italy? Evidence from Administrative Matched Employer-Employee Data, 1985-1996

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  • Andrea Borgarello
  • Francesco Devicienti

Abstract

This paper provides new empirical evidence on the changes in the Italian wage distribution using administrative data from 1985 to 1996. Various statistical indicators are used to document a slight, but not negligible, increase in wage inequality. Standard decompositions of inequality indices by population subgroups shed light on the underlying causes of the observed distributional changes. Following Junh et al. (1993), econometric-type decompositions are also employed to disentangle the effects of observable quantities, prices and unobservable factors on inequality trends. The changing prices of observable characteristics are found to play a major role in accounting for the observed inequality increase.

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Bibliographic Info

Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 18.

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Length: 38 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:cca:wplabo:18

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Keywords: wage inequality; inequality decomposition; observable/unobservable inequality components.;

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  1. Conchita D'Ambrosio, 1999. "The Distribution of Wages: A Non-parametric Decomposition," Economics Working Paper Archive wp_284, Levy Economics Institute.
  2. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(3), pages 410-42, June.
  3. Andrea Brandolini & Piero Cipollone & Paolo Sestito, 2001. "Earnings Dispersion, Low Pay and Household Poverty in Italy, 1977-1998," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 427, Bank of Italy, Economic Research and International Relations Area.
  4. Francesco Devicienti & Andrea Borgarello, 2001. "Trends in the Italian Earnings Distribution, 1985-1996," LABORatorio R. Revelli Working Papers Series, LABORatorio R. Revelli, Centre for Employment Studies 2, LABORatorio R. Revelli, Centre for Employment Studies.
  5. Bruno Contini & Michelangelo Filippi & Claudio Malpede, 2000. "Safari nella giungla dei salari. Nel Mezzogiorno si lavora di meno?," LABORatorio R. Revelli Working Papers Series, LABORatorio R. Revelli, Centre for Employment Studies 3, LABORatorio R. Revelli, Centre for Employment Studies.
  6. repec:ese:iserwp:2000-41 is not listed on IDEAS
  7. Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
  8. Lorenzo Cappellari, 2002. "The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?," 10th International Conference on Panel Data, Berlin, July 5-6, 2002, International Conferences on Panel Data C2-2, International Conferences on Panel Data.
  9. Claudio Lucifora, 1999. "Wage Inequalities and Low Pay: The Role of Labour Market Institutions," Working Papers, Fondazione Eni Enrico Mattei 1999.13, Fondazione Eni Enrico Mattei.
  10. Eswar Prasad, 2002. "Wage Inequality in the United Kingdom, 1975-19+L219099," IMF Working Papers 02/42, International Monetary Fund.
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