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Low pay and household poverty in Italy

Author

Listed:
  • Chiara Mussida

    (Università Cattolica del Sacro Cuore)

  • Dario Sciulli

    (University of Chieti-Pescara)

Abstract

This paper explores how low-pay conditions of household heads and partners affect the risk of poverty in Italy. We assume low-pay work is possibly pre-determined by past poverty status, thus allowing for feedback effects from poverty to future labour market outcomes. Our analysis, based on the 2016-2019 EU-SILC panel data, reveals that low-pay work increases the risk of poverty with respect to high-pay conditions. Notably, the effect of low-pay work on poverty with respect to non-employment (both unemployment and inactivity) differs between household heads and partners. It is greater for the former and smaller for the latter. This stresses the leading role of household heads for income formation in Italy and suggests that their earnings are scarcely competitive with non-labor income, and highlights the added-worker role of partners in the Italian households.We find evidence of feedback effects from poverty to future labor market outcomes, thus indicating the existence of a vicious circle between poverty and poor labor conditions.

Suggested Citation

  • Chiara Mussida & Dario Sciulli, 2023. "Low pay and household poverty in Italy," Working Papers 635, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2023-635
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2023-635.pdf
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    References listed on IDEAS

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    4. Hans-Jürgen Andreß & Henning Lohmann (ed.), 2008. "The Working Poor in Europe," Books, Edward Elgar Publishing, number 13060.
    5. Uhlendorff, Arne, 2006. "From No Pay to Low Pay and Back Again? A Multi-State Model of Low Pay Dynamics," IZA Discussion Papers 2482, Institute of Labor Economics (IZA).
    6. Lixin Cai & Kostas Mavromaras & Peter Sloane, 2018. "Low Paid Employment in Britain: Estimating State†Dependence and Stepping Stone Effects," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 80(2), pages 283-326, April.
    7. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    8. Filandri, Marianna & Struffolino, Emanuela, 2019. "Individual and household in-work poverty in Europe: understanding the role of labor market characteristics," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21(1), pages 130-157.
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    Cited by:

    1. Michele Bavaro & Michele Raitano, "undated". "Is working enough to escape poverty? Evidence on low-paid workers in Italy," Working Papers 656, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    poverty; low-pay work; feedback effects; panel data;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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