Unconditional and Conditional Wage Polarization in Europe

59 Pages Posted: 27 Sep 2014

See all articles by Paolo Naticchioni

Paolo Naticchioni

University of Rome I; University of Cassino

Giuseppe Ragusa

University of Pisa

Riccardo Massari

University of Rome I

Abstract

This paper investigates the dynamics of the distribution of unconditional and conditional – on technology – wages in Europe, using both industry and individual level data for the period 1995-2007. We find that the unconditional wage distribution shows scant signs of polarization in Europe. On the other hand, the effect of technology is more nuanced. At the industry level, technological changes have an effect on polarization of jobs, but not on polarization of wages. At the individual level, we use a counterfactual distributional analysis which accounts for the heterogeneity of tasks across occupations, and we find only mild evidence of wage polarization. Technology affects the lower and upper part of the wage distribution in different ways, with service tasks affecting the lower quantiles and abstract tasks affecting the higher ones.

Keywords: wage inequality, polarization, occupational tasks, offshoring, RIF-regressions

JEL Classification: J3, J5

Suggested Citation

Naticchioni, Paolo and Ragusa, Giuseppe and Massari, Riccardo, Unconditional and Conditional Wage Polarization in Europe. IZA Discussion Paper No. 8465. Available at SSRN: https://ssrn.com/abstract=2502325

Paolo Naticchioni (Contact Author)

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

University of Cassino ( email )

Cassino
Italy

Giuseppe Ragusa

University of Pisa ( email )

Lungarno Pacinotti, 43
Pisa PI, 56126
Italy

Riccardo Massari

University of Rome I ( email )

Piazzale Aldo Moro 5
Piazzale Aldo Moro, 5
Roma, Rome 00185
Italy

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