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What’s behind increasing wage inequality? Explaining the Italian case using RIF-OLS
[journal article]
Abstract This paper aims to identify how and to what extent the Italian labour market structure, in terms of job composition and institutional changes, shaped the dynamics of wages and wage inequality in the decade between 2007 and 2017. We investigate the main determinants behind the rise in wage inequality... view more
This paper aims to identify how and to what extent the Italian labour market structure, in terms of job composition and institutional changes, shaped the dynamics of wages and wage inequality in the decade between 2007 and 2017. We investigate the main determinants behind the rise in wage inequality in Italy by using Recentered Influence Function (RIF) regressions. This econometric approach allows - on the one hand - to directly assess the effects on the unconditional distribution and on "beyond the mean" statistics, like the Gini coefficient. On the other, it decomposes inequality into endowment and wage effects, following the standard Oaxaca-Blinder technique. We observe that working structures and institutional changes - contractual arrangements (permanent vs temporary contracts) and working hours (full-time vs part-time) - are the main factors in explaining the deterioration in wages at the bottom of the income distribution scale, and the consequent increase in wage inequality.... view less
Keywords
Italy; labor market; wage; wage difference; wage labor; institutional change; inequality; term contract; employment contract; working hours; part-time work; regression; difference in income
Classification
Labor Market Research
Income Policy, Property Policy, Wage Policy
Free Keywords
inequality decomposition; labour market structure; unconditional regressions; wage inequality; EU-SILC 2007; EU-SILC 2011; EU-SILC 2014; EU-SILC 2017
Document language
English
Publication Year
2024
Page/Pages
p. 229 - 265
Journal
Economia Politica, 41 (2024) 1
DOI
https://doi.org/10.1007/s40888-023-00303-0
ISSN
1973-820X
Status
Published Version; peer reviewed