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

Author

Listed:
  • Vincenzo Carrieri

    (CELPE and Universitty of Salerno, Italy)

  • Vito Peragine

    (University of Bari ``Aldo Moro'', Italy)

Abstract

We propose a structural 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 shows the highest levels of IOp and includes all eastern countries.

Suggested Citation

  • Vincenzo Carrieri & Vito Peragine, 2015. "Decomposing inequality `at work': Cross-country evidence from EU-SILC," Working Papers 357, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2015-357
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2015-357.pdf
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    References listed on IDEAS

    as
    1. X. Ramos & D. Van De Gaer, 2012. "Empirical Approaches to Inequality of Opportunity: Principles, Measures, and Evidence," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/792, Ghent University, Faculty of Economics and Business Administration.
    2. 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.
    3. 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.
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    6. 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.
    7. 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.
    8. Anders Björklund & Markus Jäntti & John Roemer, 2012. "Equality of opportunity and the distribution of long-run income in Sweden," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(2), pages 675-696, July.
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    More about this item

    Keywords

    Inequality of Opportunity; income inequality; labour attachment.;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • 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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