Differences in Equivalent Income Across Cohorts of Households: Evidence from Italy

Abstract

Using Italian SHIW data, this paper explores how the evolution of household equivalent income over the 1989–2004 period has modified the relative position of different cohorts of households, at the same head's age. The descriptive analysis reveals the economic difficulties faced by young generations: while households whose heads were born in the 1930s and 1940s gain about 8 percent over the preceding cohorts, the younger ones record an average loss of about 5 percent. These differences result from the joint occurrence of various events, like the poor performance of the economy and its adverse effects on younger workers, institutional changes to the labor market, the new rules introduced for the pensions system, and an exceptional increase in house prices and rents.