Decreasing Wage Inequality in Italy: The Role of Supply and Demand for Education
Paolo Naticchioni () and
Andrea Ricci ()
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Andrea Ricci: Univ. of Cassino, Univ. of Rome “La Sapienza”, CeLEG (LUISS-Rome) and ISFOL.
No 9-DEISFOL, Working Papers - Dipartimento di Economia from Dipartimento di Economia, Sapienza University of Rome
In this paper we show that wage inequality decreased in the Italian private sector, both in the upper and in the lower tail of the distribution, in the period 1993-2006. By applying a quantile decomposition procedure we find that the decrease of the 90/50 ratio is almost totally related to a negative coefficients component. As for the reduction of the 50/10 ratio, the quantile decomposition shows that it can be related to both the negative coefficients component and the residual component. We claim that that supply-demand interactions have to be considered as the main explanation for the falling educational wage premia that represent the driving force of the falling 90/50 ratio. The reduction of the 50/10 ratio can be instead associated to the changes in the residual component -related to compositional effects-, to the changes in the occupation distribution and to changes in tax regimes.
Keywords: Inequality; Educational Wage Premia; Quantile Decomposition; Supply-Demand of Education; Italy (search for similar items in EconPapers)
JEL-codes: J24 J31 O3 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009, Revised 2009
New Economics Papers: this item is included in nep-lab
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Working Paper: Decreasing Wage Inequality in Italy: The Role of Supply and Demand for Education (2010)
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