Wage Inequalities and Low Pay: The Role of Labor Market Institutions, Knowledge, Technology, and Human Capital

35 Pages Posted: 23 Jul 1999

See all articles by Claudio Lucifora

Claudio Lucifora

Università Cattolica del Sacro Cuore di Milano ; IZA Institute of Labor Economics

Date Written: 1999

Abstract

In this study, we investigate the role that some institutional features play in shaping the distribution of wages across a number of OECD countries. While considerable attention has been devoted in recent years to the evolution of earnings inequality and to the analysis of the competing explanations for the observed phenomena, also the existence (and persistence) of considerable structural differences--across countries--in the level of wage inequality and the incidence of low pay can shed some light on a different dimension of inequality patterns. In particular, we focus on three specific features: the effects of trade unions, the structure of collective bargaining and the existence of regulations on wages. By looking at the different moments of the distribution of earnings various dimensions of low pay have been analyzed, namely the effects of the institutional setting on the mean, the dispersion and the (time) covariance of earnings. Consistent with previous work, our results suggest that institutions are a relevant factor in shaping the distribution of earnings and the incidence of low pay. We show that institutional settings differ substantially across countries and that institutional variety in the labor market is able to explain a great deal of the observed patterns in low pay across countries.

JEL Classification: J3, J5, P5

Suggested Citation

Lucifora, Claudio, Wage Inequalities and Low Pay: The Role of Labor Market Institutions, Knowledge, Technology, and Human Capital (1999). FEEM Working Paper No. 13.99. Available at SSRN: https://ssrn.com/abstract=158791 or http://dx.doi.org/10.2139/ssrn.158791

Claudio Lucifora (Contact Author)

Università Cattolica del Sacro Cuore di Milano ( email )

Department of Economics and Finance
Largo Gemelli, 1
20123 Milano
Italy
+39 027 234 2525 (Phone)
+39 027 234 2781 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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