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The poor stay poor, the rich get rich: essays on intergenerational transmission of economic status
Full text linkPersistence of inequality across generations is an important field of research with many implications in terms of policy. Economic inequality related to the intergenerational transmission of economic opportunities may strongly influence policies designed to reduce earnings or wealth concentration. Empirical research has usually focused on the intergenerational persistence of earnings or income, considered as good measures of differences in economic well-being and consumption capacity of individuals. On the contrary, only a limited number of recent studies attempt to estimate the degree of intergenerational mobility by using net wealth as a measure of economic status of individuals.
This Ph.D thesis includes three autonomous chapters regarding the intergenerational persistence of wealth and earnings inequality and their mechanisms. The first one reviews research on wealth inequality and persistence across two or more generations. Broadly speaking, wealth is more unequally distributed than income and unlike other flow variables, may be transmitted across generations directly, by means of bequests or donations. This means that it may be a good proxy of permanent economic disparities. Unfortunately, measuring wealth is not an easy task since data on real and financial assets are incomplete and provided with many differences across countries.
Regarding the extent of correlation in wealth across generations, only a limited number of studies are able to use suitable data on wealth which cover two or more generations. In any case, according to few recent empirical works, intergenerational rank correlations in wealth seem to be usually higher than intergenerational rank correlations in income. These findings derive from the fact that wealth is more representative of cumulate resources and less affected by transitory shocks than earnings or income. Moreover, wealthy parents seem to transmit many resources to their children at the beginning of the adulthood, by making donations. This may explain why, unlike intergenerational correlations in income, intergenerational correlations in wealth seem to be very high also considering children in their 20’s.
The second chapter exploits retrospective socio-economic information about both parents to impute parental wealth in order to assess the degree of wealth mobility across generations in Italy and highlight some of the mechanisms linking parental wealth to offspring’s economic outcomes.
Using the Bank of Italy’s survey on household income and wealth (SHIW) and two samples of offspring and pseudo-parents in their 40s, I find an intergenerational age-adjusted wealth elasticity (IWE) of 0.451 and a rank-rank slope of 0.349 which appear to be robust to the use of different predictors of parental economic status. These results suggest that Italy is a low mobility country also when wealth is taken as an alternative measure of economic status.
As in the only previous study by Boserup et al. (2016) which analyses the pattern of wealth mobility over the lifecycle, the second chapter shows a U-shaped pattern of the intergenerational wealth correlation as a function of the second generation’s age with higher estimated intergenerational correlations when children are taken at the beginning of their adulthood or in their 40’s.
Geographical differences in the extent of intergenerational wealth mobility are analysed by estimating elasticities and rank-rank slopes in two different macro-areas of the country. Results suggest that the southern part of Italy is extremely less mobile than the northern part of the country.
Regarding the analysis of the mechanisms behind the intergenerational wealth correlation across two generations, the second chapter suggests that income seems to be the main intergenerational mediating factor. On the contrary, the correlation across generations of saving preferences and attitude to risk seems to explain only a small fraction of the IWE.
Finally, the third chapter (which is part of a research work with Michele Raitano and Teresa Barbieri) provides new and detailed estimates of intergenerational earnings mobility in Italy and sheds light on mechanisms behind the association of gross earnings between fathers and sons.
Being not available panel data following subsequent generations in Italy, we make use of a recently built dataset that merges information provided by IT-SILC 2005 (i.e., the Italian component of EU-SILC 2005) with detailed information about the whole working life of those interviewed in IT-SILC recorded in the administrative archives managed by the Italian national Social Security Institute (INPS).
This dataset allows us to rely on the two-sample two-stage least squares method (TSTSLS) to predict father earnings and, then, compute point in time intergenerational elasticities (IGE) and imputed rank-rank slopes. Furthermore, the characteristics of the dataset allow us to extend point in time estimates considering, for both sons and “pseudo-fathers”, average earnings in a 5-year period and observing sons at various ages, thus assessing the robustness of our estimates to attenuation and life cycle biases.
Confirming previous evidence (Mocetti 2007; Piraino 2007), we find that Italy is characterized by a relatively high earnings elasticity in cross country comparison – the size of the estimated β is usually over 0.40 – and the size of the intergenerational association increases when older sons and multi-annual averages are considered.
We then investigate mechanisms behind this association both: i) including a set of possible mediating factors of the parental influence (e.g., sons’ education, occupation, labour market experience) among the control variables when regressing sons’ earnings on fathers’ earnings and ii) following the sequential decomposition approach suggested by Blanden, Gregg and Macmillan (2007). Results show that a limited share of the intergenerational association is attributable to sons’ educational and occupational attainment, while the largest part of the association is mediated by sons’ employability, i.e., by their effective experience since the entry in the labour market.
Results show that the mediating role of education in Italy is limited, especially if compared with evidence obtained for other countries such as the US and UK
Le agevolazioni fiscali alla previdenza integrativa in Italia: una valutazione di equità ed efficienza
No full textLa letteratura economica chiarisce come, lasciati da soli nelle loro scelte, gli individui possano non essere in grado di risparmiare le somme necessarie per garantirsi un reddito adeguato nell’età anziana. Il risparmio previdenziale – ovvero quelle forme di risparmio il cui utilizzo a fini di consumo non è possibile prima che il beneficiario abbia raggiunto una certa età (di solito coincidente con l’età per la pensione) – presenta caratteristiche di «bene meritorio», ovvero un bene di cui l’operatore pubblico – assumendo un atteggiamento paternalistico – obbliga o incentiva il consumo (presso fornitori pubblici o privati), per superare le inevitabili carenze informative (o gli atteggiamenti opportunistici) individuali
Intergenerational Earnings Inequality: New Evidence From Italy
No full textUsing an innovative dataset built by merging survey and administrative data, we provide new estimates of intergenerational earnings’ inequality between fathers and sons in Italy, extending previous evidence in several directions. We rely on the TSTSLS method to predict fathers’ earnings and compute intergenerational elasticities and imputed rank–rank slopes, trying to reduce estimation biases. Confirming previous evidence, we find that Italy is characterized by a high intergenerational inequality in cross-country comparison. Extending previous analyses, we show that the intergenerational association increases when sons at older ages and multi-annual averages of pseudo-fathers’ and sons’ earnings are considered. We also find that the intergenerational persistence differs across geographical macro-areas and is high also for daughters, especially when family earnings are considered. Furthermore, estimates where possible mediating factors of the parental influence are included among the covariates show that a high intergenerational association persists when sons’ education and occupation are controlled for
FUNCTIONAL INCOME DISTRIBUTION, INEQUALITY AND THE EFFECTIVENESS OF FISCAL REDISTRIBUTION: EVIDENCE FROM OECD COUNTRIES
Full text linkUsing panel data on 34 OECD countries followed from 2000 to 2015, we analyse the extent to
which the labour share plays a role in mitigating the link between market and disposable
income inequality in the non-comprehensive personal income tax hypothesis (i.e. when some
or all capital income items are excluded from the personal income tax base). We find that one
standard deviation increase of labour share is significantly related to a 9-percentage points
reduction in the elasticity of disposable income inequality with respect to market income
inequality. This important result obtained after controlling for country and year fixed effects,
country-specific linear trends and several variables capturing the characteristics of the taxbenefit
system in terms of overall progressivity, suggests that labour share could be considered
as an “automatic stabilizer” of income inequality. Relevant implications for tax policy concern
the role of the tax base of the personal income tax for the overall redistributive effect of the
public budget
Vaccination policy and mortality from COVID-19 in the European Union
Full text linkThis paper estimates the dynamic effect of vaccination on mortality from COVID-19 using weekly data from 26 European Union countries during 2021. Our analysis relies on the double machine learning method to control for multiple confounders, including nonpharmaceutical interventions, climate variables, mobility factors, variants of concern, country- and week-specific shocks. In our baseline specification, we show that a 10-pp. increase in cumulative doses per 100 inhabitants averts 5.08 COVID-19 deaths per million inhabitants at the 8-week horizon and 26.41 deaths in the 8-week time window considered. The average reduction in mortality in this window is close to 50%. Further estimates reveal that the effect of doses administered to adults aged 18-59 does not statistically differ from that of doses received by people aged 60+. Finally, vaccine-specific estimates document that mRNA-1273 (Moderna) and Vaxzevria (AstraZeneca) are more cost-effective in saving lives than Comirnaty (Pfizer), while we are unable to demonstrate any effect of Ad26.COV2.S (J&J)
Intergenerational earnings inequality. New evidence from Italy
No full textUsing an innovative dataset built by merging survey and administrative data, we provide new estimates of intergenerational earnings’ inequality between fathers and sons in Italy, extending previous evidence
in several directions. We rely on the TSTSLS method to predict fathers’ earnings and compute intergenerational elasticities and imputed rank–rank slopes, trying to reduce estimation biases. Confirming previous evidence, we find that Italy is characterized by a high intergenerational inequality in crosscountry comparison. Extending previous analyses, we show that the intergenerational association
increases when sons at older ages and multi-annual averages of pseudo-fathers’ and sons’ earnings are considered. We also find that the intergenerational persistence differs across geographical macro-areas
and is high also for daughters, especially when family earnings are considered. Furthermore, estimates where possible mediating factors of the parental influence are included among the covariates show that
a high intergenerational association persists when sons’ education and occupation are controlled for
Progressivity of personal income tax and background-related earnings advantages. Evidence from Italy and Poland
No full textIn the literature on intergenerational inequality the role of taxes is usually overlooked. In this article we try to fill this gap and inquire how the personal income tax (PIT) design affects the association
between parental background and adult children’s earnings. Specifically, we analyse how this association changes when net rather than gross children’s earnings are considered and disentangle
what such changes depend on: differences between pre and after taxes earnings inequality or reranking of individuals along the earnings distribution before and after taxes. To this aim, using data
from EU-SILC 2011, we focus on two large European countries, Italy and Poland, with comparable levels of inequality and background-related earnings premia but very different PIT design and
estimate – at both the mean and the deciles of the earnings distribution – the association between parents’ characteristics and children’s gross and net earnings. We find that in Italy the PIT reduces the
magnitude of this association at the top of the distribution, while no effects emerge for Poland, and the reduction is mostly due to a decrease in earnings inequality rather than to a re-ranking of children
along the distribution. Our findings are confirmed when we simulate the introduction of a ‘quasi-flat tax’ regime in Italy. This suggests that the higher the tax progressivity, the higher the backgroundrelated
inequality reduction and the lower the association between parental background and children earnings, signalling that the degree of progressivity among children may be an effective weapon to
reduce intergenerational inequality
La ricchezza delle famiglie. Distribuzione e tendenze
No full textAttraverso l’indagine sui bilanci
delle famiglie italiane della Banca
d’Italia, l’articolo analizza
l’andamento della ricchezza
in Italia dal 1991
al 2014. Si valuterà
inoltre in che dimensione
la disuguaglianza nella distribuzione
della ricchezza è associata
a fattori quali differenze nel livello
di reddito familiare
permanente oppure quanto
è forte il peso dell’eredità nel
determinare gli esiti distributivi
- …
