TY - JOUR
T1 - Labour market structure and inequality
T2 - A comparison of Italy and the U.S
AU - Flinn, Christopher J.
N1 - Funding Information:
Acknowledgements. This research was partially supported by the C.V. Starr Center for Applied Economics at New York University. I am especially grateful to Ugo Trivellato and Enrico Rettore for making the Italian data used in this research available to me. Helpful comments were received from seminar participants at Bocconi, Padova, Penn, the IRP at the University of Wisconsin, DELTA, the Equilibrium Wage Distributions Conference (Paris), the Savings Workshop (Tilburg), the European University Institute, and NYU. Orazaio Attanasio, Giuseppe Bertola, Tito Boeri, Meta Brown, 20. Under our assumption that the lower bound of the support of the Pareto is equal to the reservation wage, this distribution is the same as F.
PY - 2002/7
Y1 - 2002/7
N2 - Markets with rigid labour regulations and centralized wage setting are often thought to be inefficient but egalitarian. Using a model of off- and on-the-job search and event-history, individual-level data for Italy and the U.S., we show that while the cross-sectional wage distributions of young Italian males are much more compressed than are the comparable distributions for young white U.S. males, the estimated search model implies that the distribution of lifetime welfare is no more disperse in the U.S. than it is in Italy. Our model implies that the high frequency of movements between labour market states leads to both a relatively equitable distribution of "long run" welfare in the U.S. and a high level of cross-sectional inequality.
AB - Markets with rigid labour regulations and centralized wage setting are often thought to be inefficient but egalitarian. Using a model of off- and on-the-job search and event-history, individual-level data for Italy and the U.S., we show that while the cross-sectional wage distributions of young Italian males are much more compressed than are the comparable distributions for young white U.S. males, the estimated search model implies that the distribution of lifetime welfare is no more disperse in the U.S. than it is in Italy. Our model implies that the high frequency of movements between labour market states leads to both a relatively equitable distribution of "long run" welfare in the U.S. and a high level of cross-sectional inequality.
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U2 - 10.1111/1467-937X.t01-1-00024
DO - 10.1111/1467-937X.t01-1-00024
M3 - Article
AN - SCOPUS:0036656258
SN - 0034-6527
VL - 69
SP - 611
EP - 645
JO - Review of Economic Studies
JF - Review of Economic Studies
IS - 3
ER -