The Role of Temporary Jobs in Explaining Increasing Inequality for Recent Cohorts in Italy

Alessio Tomelleri

No BEMPS71, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: Using tax-based longitudinal microdata from 1985 to 2016, I document how the widening income distribution in Italy is driven by younger cohorts. Entry wages started to decrease around the mid-1990s, at the same time returns to experience of new entrants in the labour market declined. Falling wage growth is linked to the institutional changes that occurred in the Italian labour market in the decade across the 2000s. I examine the impact of Italian labour market reforms on cohort-specific wage inequality by looking at the relationship between the number of temporary job spells and individual earnings. Results confirm that young and high-skilled new entrants show higher wage differential in comparison to older workers and that the increase in temporary jobs is a crucial factor in explaining the cohort wage gap.

Keywords: Income inequality; Cohort analysis; Labour market institutions (search for similar items in EconPapers)
JEL-codes: J31 J41 (search for similar items in EconPapers)
Pages: [33 pages]
Date: 2020-08
New Economics Papers: this item is included in nep-eur and nep-lma
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