Mobility at the Bottom of the Italian Earnings Distribution

Abstract

The issue of low-paid employment has received considerable attention from researchers and policy makers in recent years (see OECD, 1993, 1996). The rise of earnings inequality occurred in many industrialised economies has placed a growing proportion of the employed labour force below pre-determined ‘decency thresholds’ in the earnings distribution, raising equity concerns and revitalising interest in redistributive tools such as minimum wages (see Freeman, 1996). Authors have also stressed that the diffusion of low-paid employment might lead to efficiency losses if it is concentrated in industries with monopsonistic labour markets in which rising inequality translates into a widening gap between equilibrium wages and their perfectly competitive level (Lucifora, 1998).