Working Paper: CEPR ID: DP18224
Authors: Juraj Briskar; Edoardo Di Porto; Jos V RodrÃguez Mora; Cristina Tealdi
Abstract: Regional disparities play a marginal role in determining inequality between Italians, both in cross-section and in a lifetime sense. In spite of large differences in average income between provinces, less than 4% of cross-sectional inequality can be attributed to between-province differences. In contrast, information on industry of similar level of detail can explain roughly a quarter of earnings and wage inequality. The share of between-province variance in lifetime income is 3.4% for the whole cohort and only 1.8% for males. For females, it is as high as 10.2%. Thus, geography is a vector explaining inequality between Italians only in affecting female labor force participation. Finally, knowing the income of a person also does not help predict her province of birth or residence.
Keywords: variance decomposition; lifetime income; regional inequality; earnings and wage inequality
JEL Codes: E24; J3; R1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Geography (R12) | Income Inequality (D31) |
| Geography (R12) | Female Labor Force Participation (J21) |
| Industry (L89) | Earnings and Wage Inequality (J31) |
| Province of Birth (J19) | Lifetime Income Predictive Power (J17) |
| Differences Within Provinces (H73) | Income Inequality (D31) |
| Income (D31) | Province of Birth Predictive Power (J19) |