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What Accounts For the Rise in Wage Inequality in Italy? Evidence from Administrative Matched Employer-Employee Data, 1985-1996

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  • Andrea Borgarello
  • Francesco Devicienti

Abstract

This paper provides new empirical evidence on the changes in the Italian wage distribution using administrative data from 1985 to 1996. Various statistical indicators are used to document a slight, but not negligible, increase in wage inequality. Standard decompositions of inequality indices by population subgroups shed light on the underlying causes of the observed distributional changes. Following Junh et al. (1993), econometric-type decompositions are also employed to disentangle the effects of observable quantities, prices and unobservable factors on inequality trends. The changing prices of observable characteristics are found to play a major role in accounting for the observed inequality increase.

Suggested Citation

  • Andrea Borgarello & Francesco Devicienti, 2002. "What Accounts For the Rise in Wage Inequality in Italy? Evidence from Administrative Matched Employer-Employee Data, 1985-1996," LABORatorio R. Revelli Working Papers Series 18, LABORatorio R. Revelli, Centre for Employment Studies.
    • Handle: RePEc:cca:wplabo:18
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    References listed on IDEAS

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    More about this item

    Keywords

    wage inequality; inequality decomposition; observable/unobservable inequality components.;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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