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Labour income inequality and in-work poverty: a comparison between euro area countries

Author

Listed:
  • Giulia Bovini

    (Bank of Italy)

  • Emanuele Ciani

    (Bank of Italy)

  • Marta De Philippis

  • Stefania Romano

    (Bank of Italy)

Abstract

We study inequality in gross labour income among the working-age population, comparing Italy to the other main euro area countries. We use EU-SILC data between 2008 and 2018, the longest period without time breaks. We show that inequality in individual labour income is higher in Italy than in France and Germany. This is mainly a consequence of the lower employment rate, i.e. of the higher share of working-age individuals with no labour income, rather than of wider earnings disparities among workers. Inequality in equivalised household labour income is also higher in Italy than in France in Germany because a lower employment rate translates into a larger share of single or no-earner households. In line with these findings, while in Italy low-earning workers are relatively few, they face a greater risk of poverty than in France or Germany, since they more often live in households where other members are not employed or have low-work-intensity jobs. These results stress the importance of jointly considering earnings and employment dynamics when analysing labour income inequality, low-pay work, and in-work poverty.

Suggested Citation

  • Giulia Bovini & Emanuele Ciani & Marta De Philippis & Stefania Romano, 2023. "Labour income inequality and in-work poverty: a comparison between euro area countries," Questioni di Economia e Finanza (Occasional Papers) 806, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_806_23
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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