Labour income inequality and in-work poverty: a comparison between euro area countries

Giulia Bovini (), Emanuele Ciani, Marta De Philippis and Stefania Romano ()
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Giulia Bovini: Bank of Italy
Stefania Romano: Bank of Italy

No 806, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We study inequality in gross labour income among the working-age population, comparing Italy to the other main euro area countries. We use EU-SILC data between 2008 and 2018, the longest period without time breaks. We show that inequality in individual labour income is higher in Italy than in France and Germany. This is mainly a consequence of the lower employment rate, i.e. of the higher share of working-age individuals with no labour income, rather than of wider earnings disparities among workers. Inequality in equivalised household labour income is also higher in Italy than in France in Germany because a lower employment rate translates into a larger share of single or no-earner households. In line with these findings, while in Italy low-earning workers are relatively few, they face a greater risk of poverty than in France or Germany, since they more often live in households where other members are not employed or have low-work-intensity jobs. These results stress the importance of jointly considering earnings and employment dynamics when analysing labour income inequality, low-pay work, and in-work poverty.

Keywords: working-age population; employment rate; inequality; in-work poverty (search for similar items in EconPapers)
JEL-codes: J21 J30 J82 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-eec and nep-eur
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_806_23

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