The Role of Industries in Rising Inequality

Arbeitspapier

We analyse thirty years of Italian private sector employment data (1985-2018) to study the dynamics of rising earnings inequality. The total variance surged by 10 log points, with 55% occurring between industries, particularly in a few low-paid service sectors. Workers with low earnings ability showed increased likelihood of working in industries with low average firm premium (sorting) together with other low-earning workers (segregation). Strikingly, parallels with the US emerge. In both, inequality increased predominantly between industries and concentrated within a small number of sectors. Italy's increase primarily stems from low-paying sectors, diverging from the more balanced growth observed in the US across high-paying and low-paying industries. Our findings suggest that despite institutional differences similar underlying forces are at work.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16693

Classification and Topics

• Classification: Wirtschaft ; Institutions and the Macroeconomy ; Aggregate Factor Income Distribution ; Labor Economics: General
• Subject: earnings inequality ; industries ; sorting ; segregation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Briskar, Juraj ; di Porto, Edoardo ; Rodriguez Mora, José V. ; Tealdi, Cristina
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282820
• Last update: 10.03.2025, 11:44 AM CET