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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
    1. Paolo Brunori & Francisco H. G. Ferreira & Vito Peragine, 2013. "Inequality of Opportunity, Income Inequality, and Economic Mobility: Some International Comparisons," Palgrave Macmillan Books, in: Eva Paus (ed.), Getting Development Right, chapter 0, pages 85-115, Palgrave Macmillan.
    2. Xavier Ramos & Dirk Van de gaer, 2012. "Empirical approaches to inequality of opportunity: Principles, measures, and evidence," Working Papers 259, ECINEQ, Society for the Study of Economic Inequality.
    3. Ramos, Xavier & Van de gaer, Dirk, 2012. "Empirical Approaches to Inequality of Opportunity: Principles, Measures, and Evidence," IZA Discussion Papers 6672, Institute of Labor Economics (IZA).
    4. François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2013. "Inequality of Opportunity in Brazil: A Corrigendum," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(3), pages 551-555, September.
    5. Daniele Checchi & Vito Peragine, 2010. "Inequality of opportunity in Italy," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(4), pages 429-450, December.
    6. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    7. McBride, Michael, 2001. "Relative-income effects on subjective well-being in the cross-section," Journal of Economic Behavior & Organization, Elsevier, vol. 45(3), pages 251-278, July.
    8. Vincenzo Carrieri, 2012. "Social Comparison And Subjective Well‐Being: Does The Health Of Others Matter?," Bulletin of Economic Research, Wiley Blackwell, vol. 64(1), pages 31-55, January.
    9. Giuseppe Pignataro, 2012. "Equality Of Opportunity: Policy And Measurement Paradigms," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 800-834, December.
    10. repec:dau:papers:123456789/11396 is not listed on IDEAS
    11. Ferrer-i-Carbonell, Ada, 2005. "Income and well-being: an empirical analysis of the comparison income effect," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 997-1019, June.
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    More about this item

    Keywords

    inequality of opportunity; income inequality; labour attachment;
    All these keywords.

    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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