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Intergenerational Earnings Inequality in Italy: New Evidence and Main Mechanisms

Teresa Barbieri, Francesco Bloise () and Michele Raitano ()

No 2/2018, Working Papers from Interuniversity Research Center "Ezio Tarantelli"

Abstract: This article provides new estimates of intergenerational earnings inequality in Italy, shedding light on the mechanisms behind the association of gross earnings between fathers and sons. Using a dataset built merging the 2005 wave of the Italian component of the EU-SILC survey with administrative information on the whole working career of individuals sampled in that wave, we rely on the two-sample two-stage least squares method to predict fathers earnings and compute intergenerational elasticities and imputed rank-rank slopes, also trying to reduce possible attenuation and life-cycle biases. Confirming previous evidence, we find that Italy is characterised by a relatively high intergenerational earnings inequality in cross country comparison. Extending previous analyses, we show that the size of the intergenerational association enlarges when sons at older ages and multi-annual averages of pseudo-fathers and sons earnings are considered. Furthermore, running estimates in which possible mediating factors of the parental influence are included among the covariates, we find that a high intergenerational association persists when sons education and occupation are controlled for.

Keywords: intergenerational inequality; rank-rank slope; TSTSLS method; mechanisms of intergenerational transmission; Italy (search for similar items in EconPapers)
JEL-codes: J24 J31 J62 (search for similar items in EconPapers)
Pages: 36
Date: 2018-02
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