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The labour market and the distribution of income: an empirical analysis for Italy

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  • Fabio Clementi

    (University of Macerata)

  • Michele Giammatteo

    (Bank of Italy)

Abstract

This paper provides an empirical examination of the distribution of labour earnings in Italy. Using four waves of data from the Participation Labour Unemployment Survey, a database of information on the Italian labour market supply, we find the shape of the observed distributions to be positively skewed with a “fat” and long tail on the right. We also address the question of earnings dispersion by applying a “nested” decomposition procedure of the Theil inequality measure, which combines into a unified framework the standard decompositions by population subgroups and income sources. The empirical evidence obtained points to the key role played by the self-employees in shaping labour income inequality, especially at the upper extreme of the earnings distribution, and the emergence of non-standard forms of employment as an important feature of the contemporary workplace.

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Bibliographic Info

Paper provided by Macerata University, Department of Studies on Economic Development (DiSSE) in its series Working Papers with number 42-2012.

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Date of creation: Jun 2012
Date of revision: Jun 2012
Handle: RePEc:mcr:wpaper:wpaper00042

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Keywords: inequality; size distribution; labour income;

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References

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  1. Martin Schindler, 2009. "The Italian Labor Market," IMF Working Papers 09/47, International Monetary Fund.
  2. Picchio, M., 2006. "Wage differentials and temporary jobs in Italy," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5573981, Tilburg University.
  3. Carlo Dell'Aringa & Laura Pagani, 2007. "Collective Bargaining and Wage Dispersion in Europe," British Journal of Industrial Relations, London School of Economics, vol. 45(1), pages 29-54, 03.
  4. Anderson, Edward, 2005. "Openness and inequality in developing countries: A review of theory and recent evidence," World Development, Elsevier, vol. 33(7), pages 1045-1063, July.
  5. Torrini, Roberto, 2005. "Cross-country differences in self-employment rates: the role of institutions," Labour Economics, Elsevier, vol. 12(5), pages 661-683, October.
  6. Harrison, Alan, 1981. "Earnings by Size: A Tale of Two Distributions," Review of Economic Studies, Wiley Blackwell, vol. 48(4), pages 621-31, October.
  7. Gregg, Paul & Manning, Alan, 1997. "Skill-biassed change, unemployment and wage inequality," European Economic Review, Elsevier, vol. 41(6), pages 1173-1200, June.
  8. Federico Lucidi & Michele Raitano, 2009. "Molto flessibili, poco sicuri: lavoro atipico e disuguaglianze nel mercato del lavoro italiano," Economia & Lavoro, Fondazione Giacomo Brodolini, issue 2, pages 99.
  9. Barth, Erling & Lucifora, Claudio, 2006. "Wage Dispersion, Markets and Institutions: The Effects of the Boom in Education on the Wage Structure," IZA Discussion Papers 2181, Institute for the Study of Labor (IZA).
  10. Mark P. Moore & Priya Ranjan, 2005. "Globalisation vs Skill-Biased Technological Change: Implications for Unemployment and Wage Inequality," Economic Journal, Royal Economic Society, vol. 115(503), pages 391-422, 04.
  11. Paul, Satya, 2004. "Income sources effects on inequality," Journal of Development Economics, Elsevier, vol. 73(1), pages 435-451, February.
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