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The Dynamics and Inequality of Italian Men’s Earnings: Long-term Changes or Transitory Fluctuations?

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  • Lorenzo Cappellari

Abstract

This paper provides a longitudinal perspective on changes in Italian men’s earnings inequality since the late 1970s by decomposing the earnings autocovariance structure into its long-term and transitory parts. Cross-sectional earnings differentials grew over the period and the longitudinal analysis shows that such growth was determined by the long-term earnings component. Using parameter estimates to analyze low-pay probabilities shows that low-pay persistence and the probability of repeated low-pay episodes grew for all birth cohorts during the early 1990s. Moreover, long-term heterogeneity is found to characterize the earnings distribution of nonmanual workers, accounting for a large part of overall heterogeneity.

Suggested Citation

  • Lorenzo Cappellari, 2004. "The Dynamics and Inequality of Italian Men’s Earnings: Long-term Changes or Transitory Fluctuations?," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    • Handle: RePEc:uwp:jhriss:v:39:y:2004:i:2:p475-499
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