ORIGINAL ARTICLE
The increase in earnings inequality in Italy: The role and persistence of atypical contracts
Domenico Depalo, Salvatore Lattanzio,
Corresponding Author
Salvatore Lattanzio
Bank of Italy
Correspondence to: Salvatore Lattanzio, Bank of Italy, Via Nazionale, 91, 00184 Rome, Italy ([email protected]).
Search for more papers by this authorDomenico Depalo, Salvatore Lattanzio,
Corresponding Author
Salvatore Lattanzio
Bank of Italy
Correspondence to: Salvatore Lattanzio, Bank of Italy, Via Nazionale, 91, 00184 Rome, Italy ([email protected]).
Search for more papers by this authorFirst published: 08 July 2024
We would like to thank the Editor and two anonymous reviewers for their comments. We also benefitted from comments and discussion with Rosario Ballatore, Giulia Bovini, Alessandra Casarico, Emanuele Ciani, Federico Cingano, Fabrizio Colonna, Francesco D'Amuri, Marta De Philippis, Edoardo Di Porto, Stefania Romano, Roberto Torrini, Eliana Viviano, and audiences at Roma Tre University and the 38th Conference of the Italian Association of Labour Economics (AIEL). The views expressed in this article are those of the authors and are not the responsibility of the Bank of Italy or the Eurosystem. Any error or omission is the sole responsibility of the authors. There are no conflicts of interest or competing interests to declare.
Abstract
This paper investigates the factors that shape earnings inequality, using administrative matched employer-employee data from the Italian Social Security Institute (INPS), between 1990 and 2021. It reveals that inequality in annual earnings rose steadily over time according to various measures, such as the Gini index, the interquartile ranges, and the variance. When exploring the mechanisms behind such an increase, it shows that the rise in inequality is driven by the quantity of work, which varied heterogeneously across workers, as atypical contracts (e.g., part-time and fixed-term) became widespread in the economy. We compare these measures based on the annual compensation of workers with those based on full-time equivalent weekly wages, which display a much less dispersed evolution over time, except during the double-dip recession in 2008–2012. Finally, we document a large persistence, increasing over time, in disadvantaged positions both in the short- and in the long-run.
Supporting Information
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