Cristiano Perugini

Income Inequality within European Regions: Determinants and Effects on Growth

Economic inequality across Europe has been largely investigated by analysing the determinants and dynamics of the disparities between countries and regions. Similarly, many studies have focused on inequality within European countries. So far, less attention has been devoted to economic inequality within European regions, mainly due to data shortages. The aim of this paper is to shed some light on this level of analysis. After the introductory section, the first part of the paper poses the conceptual bases of the study, examining relevant theoretical and empirical arguments about (i) the determinants of economic inequality, (ii) the relationship between economic inequality and growth, and (iii) the desirability and specificity of regional analysis. The second part of the paper, by means of various econometric approaches, provides evidence of the centrality, for regional inequality levels, of labour market qualitative and quantitative aspects and of some country-level institutional settings. As regards the effects of inequality on growth, outcomes suggest that a positive relationship may exist.

Labour Market Institutions, Crisis and Gender Earnings Gap in Eastern Europe

This paper studies gender earnings inequality in ten Central and Eastern EU countries before (2007) and during the ongoing crisis (2009), using quantile regression methods. The analysis reveals remarkable cross-country diversity in levels and patterns of the gender gap along the earning distribution. We address then the role played by country-specific labour market institutions in forming this variety. Labour market deregulation increases gender inequality, particularly reinforcing the glass-ceiling effect. Higher union density and wage coordination reduce the pay gap, with stronger equalizing effects again in the better-paid jobs. Lastly, the crisis seems to further weaken the already poor role of institutions in the low-pay sector.

Youth Unemployment in Transition Countries and Regions

The reduction of youth unemployment and the building of employment pathways is a key target of the European Employment Guidelines, within the framework of the European Employment Strategy. Beyond promoting more and better investments in human capital, the Guidelines, within the framework of the European Employment Strategy, also include targets for reducing early school leaving and a ‘new start’ within six months of unemployment for unemployed young people. Youth employment issues have also been given a higher profile in the Commission’s Strategic Guidelines for Cohesion for the period 2007–2013 as well as in the new European Social Fund regulation. In particular, in the 2007 Communication on promoting young people’s full participation in education, employment and society, the Commission stressed the need to promote youth labour market integration in the larger context of general employment policies (‘flexicurity’). Lastly, the Commission has adopted (April 27, 2009) a new EU strategy — entitled ‘Youth: Investing and Empowering’ highlighting that (1) young people are one of the most vulnerable groups in society, especially in the current economic and financial crisis and (2) in our ageing society, young people are a precious resource;1 in addition, the new strategy emphasizes the importance of youth work and defines reinforced measures for a better implementation of youth policies at the EU level.2

Speed and Sequencing of Transition Reforms and Income Inequality: a Panel Data Analysis

An extensive literature has analysed the economic effects of transition patterns in Central and Eastern European and former Soviet Union countries. With few recent exceptions, analysis of the impacts of speed and sequencing of reforms has not concerned the dynamics of income inequality. In this paper we analyse the heterogeneous effects of transition reforms on inequality by explicitly considering their speed and sequencing. To this aim we identify seven transition models in which the 27 countries considered can be classified. The dynamic panel econometric analysis for the period 1989–2006 reveals that balanced transition patterns, which favoured a coordination of reforms especially in specific fields, were relatively less pro-inequality.

Food Safety and Governance Choices.

The paper aims at analyzing organizational issues in the supply of safe food. The relationship between organizational form and level of safety does not seem, satisfactorily or systematically, to have attracted researchers’ attention. The study of the influence of the characteristics of safe food is here developed within the theoretical framework provided by Transaction Costs Economics. Behavioural uncertainty and asset specificity are taken into account in order to analyze the influence of the characteristics of food on the choice of the structure of governance. The paper proposes the idea the hybrid forms are efficiently chosen by agents and preliminary empirical evidence is provided. The study thus provides necessary premises to develop the analysis both of liability and competition within complex relationships along supply chain.

Inequalities during and after transition in Central and Eastern Europe

Foreword Jens Holscher Introduction Cristiano Perugini and Fabrizio Pompei 1. Income Distribution During and After Transition: a Conceptual Framework Cristiano Perugini and Fabrizio Pompei PART I: PERSONAL AND FUNCTIONAL INCOME DISTRIBUTION PATTERNS DURING TRANSITION 2. The Drivers of Personal Income Inequality in Transition and the Role of Reform Approaches David Aristei and Cristiano Perugini 3. Functional Income Distribution in European Transition Countries Ana Rincon-Aznar, Francesco Venturini, Michela Vecchi 4. Emigration, Employment and Inequality in Post-Communist Countries Cristiano Perugini and Fabrizio Pompei PART II: MICROECONOMICS ANALYSIS OF INCOME DISTRIBUTIONS AND THE ROLE OF INSTITUTIONAL SETTINGS 5. Income Mobility in the New EU Member States David Aristei and Cristiano Perugini 6. Earnings Inequality and Job Positions across Post-Communist European Economies Cristiano Perugini and Fabrizio Pompei 7. Wage Inequality Between and Within Education Levels in Transition Countries Cristiano Perugini and Fabrizio Pompei 8. Gender Earnings Inequality in the New EU Member States Cristiano Perugini and Ekaterina Selezneva 9. Gender Wage Inequality in the Western Balkans Marko Vladisavljevic, Sonja Avlijas and Suncica Vujic PART III: REDISTRIBUTIVE PREFERENCES AND ARRANGEMENTS 10. The Solidarity Principle in the New EU Member States Valentina Colcelli 11. Social Preferences for Redistribution in Central Eastern Europe and in the Baltic Countries David Aristei and Cristiano Perugini 12. Welfare and Redistribution in Post-Communist Countries Martin Myant and Jan Drahokoupil

Social Preferences for Redistribution in Central Eastern Europe and in the Baltic Countries

An extensive literature has highlighted how aggregate (social) preferences for redistribution are the result of a complex interaction of many forces (Alesina and Giuliano, 2009). First of all, a large number of factors affect individual attitudes towards inequality. They include current income levels (Ravallion and Lokshin, 2000), expectations about future income and social mobility (Benabou and Ok, 2001), education (Isaksson and Lindskog, 2007), age (Corneo and Gruner, 2002), gender (Crozon and Gneezy, 2008), professional and employment status (Alesina and Glaeser, 2004), ideology (Alesina and Fuchs-Schuendeln, 2007), perception of fairness (Benabou and Tirole, 2006), attitude to act in accordance to public values (Corneo and Gruner, 2002), race and ethnic group (Alesina and Glaeser, 2004), personal history (Piketty, 1995), and religious beliefs (Scheve and Stasavage, 2006). In addition, countries differ in terms of collective features affecting attitudes towards inequality, such as the exposition to macroeconomic shocks (Giuliano and Spilimbergo, 2009), cultural norms (Giuliano, 2007) and family models (Alesina and Giuliano, 2007). As economic systems differ strongly in terms both of population composition and of collective features, remarkable crosscountry heterogeneity in aggregate preferences for redistribution is to be expected.

Gender Earnings Inequality in the New EU Member States

The emphasis on economic and social equality was a hallmark of the socialist ideology. The countries of Central and Eastern Europe and the Soviet Union were actually able to maintain remarkably equal distributions of income under central planning, and were often identified as the most equal countries in the world (Atkinson and Micklewright, 1992). Yet, notable forms of disparity in living standards — associated with neither monetary flows nor property rights and thus invisible to statistics — certainly existed, and often reflected the position of individuals in the political sphere (Milanovic, 1998). The transition into market-based capitalistic systems entailed a widening of all forms of inequality (Aristei and Perugini, 2012); among them, gender disparities and their evolution played a not inconsiderable role. The crisis that started in 2008 played an additional role in reshaping the gender earnings gap patterns in the region.

Income Mobility in the New EU Member States

In this chapter we investigate intragenerational income mobility in Central Eastern European Countries (CEECs) and Baltic Countries (BCs), vis-a-vis Western Europe, in the periods before and during the global crisis. Aspects related to individual income mobility are connected in a dynamic perspective to those of inequality since the movements of economic agents along the income ladder over time shapes income distributions and their changes. In these respects, the two fields of study are highly complementary, with income mobility allowing the identification of the microeconomic drivers of changes in absolute and relative economic positions. Despite the challenges posed by data availability, research on income mobility developed significantly over the past two decades, providing a variety of possible perspectives of analysis, with alternative aggregate indices of mobility reflecting different underlying conceptual and methodological approaches (see Fields, 2007). As regards the microeconomic determinants of income mobility, the literature has primarily emphasised the role of demographic factors such as age and gender of the individuals, and the size and demographic structure of the households (e.g., Shi et al., 2010). Attention has also been paid to physical and human capital endowments, labour market conditions and positions, and initial income levels (e.g., Woolard and Klasen, 2005). More recently, institutional aspects started receiving explicit consideration too, especially with respect to labour market institutional settings (e.g., Ayala and Sastre, 2008; Sologon and O’Donoghue, 2011).

Inequality aversion in post-communist countries in the years of the crisis

Abstract This article provides estimates for the parameters of inequality aversion for 10 post-communist economies of central and eastern Europe in the years of the crisis. To this aim, we employ the information on the level of tax progressivity available in the European Union Survey on Income and Living Conditions cross-sectional microdata, under the assumption that the principle of equal sacrifice drives the choices of governments on marginal tax rates. Results reveal a remarkable variety of preferences for redistribution across the countries during the time period considered (2008–2012), with some of them converging towards the generally higher inequality aversion levels of the western European Union, perhaps as a result of policy responses to the crisis.