The increase of the gender wage gap in Italy during the 2008-2012 economic crisis
The Italian gender wage gap is lower than in other European countries, however it increased during the 2008-2012 economic crisis, while in most countries it decreased. This paper finds that the main cause of this increase is the 2010-11 public sector wage freeze, which was introduced as an austerity measure by the Italian government. We estimate the level of the gender wage gap as if the wage freeze had not been implemented, applying a counterfactual analysis. We find that the wage freeze accounts for more than 100% of the increase of the wage gap, while other factors in sum reduced the wage gap. The paper also examines the evolution of the gap from 2004 to 2012 using the Oaxaca-Blinder decomposition and a quantile decomposition. The gender wage gap is found to be unexplained by observed characteristics. After 2010 it is particularly high in the upper part of the wage distribution, indicating the existence of a glass ceiling in addition to a sticky floor.
KeywordsGender wage gap Great recession Public sector premium Decomposition Counterfactual analysis
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We are grateful to Karina Doorley for very useful suggestions. We also want to thank Leif Andreassen, Paolo Brunori, Marina Della Giusta, Alessio Fusco, Ronald Oaxaca, Raul Ramos, Enrico Rettore, Mariacristina Rossi, Eva Sierminska, Steinar Strøm, Philippe Van Kerm for helpful discussions and comments, as well as seminar participants at the University of Cambridge, LISER, FBK-IRVAPP, University of Modena, University of Torino, and conference participants at 2014 EALE, 2015 AIEL, 2016 ISTAT. The article has also benefited from useful comments by one editor of the journal, the associate editor, and the anonymous referees. We thank Collegio Carlo Alberto for financial and technical support. Part of this research was conducted while Daniela Piazzalunga was visiting LISER, and she would like to acknowledge their hospitality.
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