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Decomposing inequality 'at work': Cross-country evidence from EU-SILC

Author

Listed:
  • Vincenzo Carrieri

    (CELPE and University of Salerno, Italy)

  • Vito Peragine

    (University of Bari, Italy)

Abstract

We propose an empirical model to estimate inequality of opportunity (IOp) among workers and to distinguish two different sources of inequality: (i) inequality in the labour attachment and (ii) inequality in the remuneration of each working hour. Considering working hours as a measure of effort, our model can also be conceived as an attempt of disentangling the direct from the indirect contribution of circumstances to IOp. We estimate a system of seemingly unrelated regression equations and we use an original identification strategy based on a local market condition variable acting as exclusion restriction. By using data from the 2011 wave of the EU-SILC data base, we find in general a strong positive direct effect and a negative indirect effect of circumstances on overall IOp. Moreover, we are able to identify three cluster of countries: a first cluster includes continental countries (Italy, Spain, France) and Sweden, which show a low degree of IOp. A second cluster shows "moderate" levels of IOp and includes Finland and United Kingdom. A third cluster of countries show the highest levels of IOp and includes all eastern countries.

Suggested Citation

  • Vincenzo Carrieri & Vito Peragine, 2014. "Decomposing inequality 'at work': Cross-country evidence from EU-SILC," Working papers 15, Società Italiana di Economia Pubblica.
    • Handle: RePEc:ipu:wpaper:15
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    References listed on IDEAS

    as
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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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