Wages and Inequality
Wages differ across countries, periods, sectors, firms and types of workers, reflecting both market forces and a variety of labor market institutions. Investigating the determinants of the wage structure, and its changes over time, is crucial for a better understanding of the way the labor market functions and, ultimately, affects workers’ well-being. Not surprisingly, many aspects of wages are the subject of an intense research activity carried out at the LABORatorio Revelli, such as:
- the trends and causes of wage inequality and earnings mobility;
- the role of unions and wage bargaining institutions in shaping the wage structure;
- the various dimensions of wage inflexibility, ranging from the responsiveness of wages to unemployment and productivity to the extent of profit-sharing in firm-level bargaining;
- gender wage gaps or key geographical wage differentials, both at the national and cross-country level;
- the relationship between wages, working conditions and job satisfaction.
A related research area (Poverty and Social Exclusion) is concerned with investigating how job experiences and earned income impinge on individuals’ material well-being and sense of personal achievement and, conversely, to what extent unfavorable labor market developments are conducive to poverty and social exclusion.
The LABORatorio research on wages, inequality, poverty and social exclusion is usually undertaken through micro-econometric analyses of large individual-level databases, for example the Work Histories Italian Panel, the Labor Force Survey, the Bank of Italy’s Survey of Income and Wealth, the European Community Household Panel or the European Working Condition Surveys.
Additionally, the researchers of the LABORatorio are actively engaged in the construction of new databases, often by combining existing ones, in order to answer otherwise difficult economics questions. Recent examples of this activity include:
- the integration of the Worker History Italian Panel with balance-sheet firm-level data from AIDA;
- the reconstruction of contractual wages and wage drift at the individual level for the workers observed in the Worker History Italian Panel;
- the reconstruction of labor costs at the individual level for the workers observed in the Worker History Italian Panel.
Poverty and Social Exclusion
The research under this heading draws together inter-related interests in the role of personal characteristics, labor market institutions and government policy to prevent poverty and social exclusion at the individual level. On the one hand, our research focuses on documenting the dynamics of poverty and social exclusion experienced by individuals living in Europe. On the other hand, it also tries to shed light on the determinants of such processes, disentangling the relative impact of individual demographic characteristics, labor marker circumstances and social policies in shaping the observed trends of social and economic deprivation.
In particular, current research focuses on the following issues:
- Estimating the distribution of time spent in poverty and the degree of poverty persistence for individuals living in Italy, and comparisons with other EU countries.
- Comparing various definitions of poverty, e.g. income poverty and multidimensional deprivation concepts, and analyzing the incidence and longitudinal persistence of each type of deprivation at the individual level.
- Analyzing the causes leading to deprivation dynamics in order to understand if, and why, an individual experiencing economic or social deprivation today is more likely to re-experience it in the future.
- Exploring the inter-dependency, both in a static and in a dynamic perspective, of the various social dimensions of deprivation, e.g. between income poverty and overall indicators of social exclusion.