The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?
This paper looks at longitudinal aspects of changes in Italian male earnings inequality since the late 1970s by decomposing the earnings autocovariance structure into its persistent and transitory parts. Cross-sectional earnings differentials are found to grow over the period. The longitudinal analysis shows that such growth is determined by the permanent earnings component and is due both to a divergence of earnings profiles over the working career and an increase in overall persistence during the first half of the 1990s. Using these estimates to analyse low pay probabilities shows that it became more persistent for all birth cohorts; consequently, the probability of repeated low pay episodes also increased during the sample period. When allowing for occupation-specific components in the parameters of interest, life time earnings divergence is found to characterise the non-manual earnings distribution.
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|Date of creation:||01 Dec 2000|
|Date of revision:|
|Contact details of provider:|| Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK|
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