Michele Raitano

Persistence of inequality in Europe: the role of family economic conditions

In this article we analyse the intergenerational transmission of income inequality in 13 European countries on the basis of information provided by the European Union Statistics on Income and Living Conditions 2005 dataset. Improving on the literature dealing with the influence of family economic conditions on income earned in adult age by the offspring, we are able to estimate separately the effect operating through education and a direct economic effect. The latter, in some European countries, is of significant magnitude and seems to be related to the welfare regimes of the various countries. These findings highlight an additional characteristic of welfare regimes and allow a better understanding on how family conditions and institutions may interact in the process of inequality persistence across generations.

Migrant Remittances and Inequality in Central-Eastern Europe

The impact of remittance flows on growth and income distribution has attracted a great deal of attention, but the theoretical and empirical literature on the relationship between remittances and economic development is far from clear. Although there is wide consensus that foreign remittances can help the receiving households to increase income, consumption and capabilities to cope with socioeconomic shocks, there has been little quantitative research on impacts of remittances on household welfare and poverty. Our paper seeks to fill some of these gaps proposing an empirical analysis of the role of remittances as a tool for reducing inequality and covering households against poverty and social exclusion risks. The empirical analysis focuses on four Eastern European Countries: Slovenia, Poland, the Czech Republic and Hungary, and is based on the EU‐SILC (European Union Statistics on Income and Living Conditions) 2005 data‐set providing for each household information as to the received inter‐household cash transfers and among which regular cash support from households in other countries (i.e. remittances) are included. The results show that remittances are statistically significant in terms of poverty reduction even if their effects are generally smaller than those of welfare transfers. Furthermore, the impact of remittances and welfare transfers differ across the countries considered.

Peer heterogeneity, school tracking and students’ performances: evidence from PISA 2006

This paper analyses the interaction between school-tracking policies and peer effects in OECD countries. Using the Programme for International Student Assessment (PISA) 2006 data set, we show that linear peer effects are slightly concave-shaped in both early-tracking and comprehensive educational systems, but generally stronger in the early-tracking one. Second, and more interestingly, the effect of peer heterogeneity goes in opposite directions in the two systems. In both student- and school-level estimates, peer heterogeneity reduces students’ achievements in the comprehensive system while it has a positive impact in the early-tracking one. This reversal effect is robust to different definitions of early-tracking system, to the inclusion of pseudo-school fixed effects and to the exclusion of outlier countries. Finally, peer effects are stronger for low-ability students in both groups of countries.

Austerity-Driven Labour Market Reforms in Southern Europe: Eroding the Security of Labour Market Insiders

The sovereign debt crisis in the Eurozone and increased pressures for ‘structural reform’ have led to a period of intensive change in labour market policy in Southern Europe. Examining the cases of Greece, Portugal, Spain and Italy, this article focuses on the security of labour market insiders, a key group in labour markets that is highly segmented. The security of labour market insiders is conceptualised as consisting of security in employment (protection against dismissals) and security in unemployment (protection against drops in income provided by unemployment insurance and assistance). Using changes in national laws, the article charts and compares labour market change along these two dimensions across these four Southern European countries. Because labour market reform has not been restricted to Southern Europe, the article also compares these developments to broader changes in the countries of the Eurozone, using OECD and MISSOC data. Having demonstrated the degree to which the security of labour market insiders has diminished, the article concludes with an agenda for research on the policy dynamics of Southern European labour market reform in the wake of the financial crisis.

The flip side of the coin: the consequences of the European budgetary projections on the adequacy of social security pensions

The Ageing Working Group (AWG) assesses the long-term sustainability of public finances by presenting a set of public expenditure projections for all Member States, including projections on pensions. These projections are based on demographic forecasts and agreed assumptions on key economic variables. The adequacy and sustainability of pensions are, however, two sides of the same coin and a full assessment of pensions therefore requires integration. This paper applies the dynamic micro-simulation model MIDAS to assess the consequences of the AWG projections and assumptions on the future adequacy of public pensions in Belgium, Germany and Italy. A comparison of the simulation results suggests that the impact of the parametric pension reform in Belgium and Germany and the systemic reform in Italy on (re) distribution and the risk of low-income go in the same direction, but that the magnitudes differ. Indeed, the impact is stronger in Italy than in Belgium and Germany. In the latter especially, important changes safeguarding the sustainability of the pension system seem to have had a relatively small impact on the risk of low-income among pension benefit recipients in particular.

Poverty transitions and trigger events across EU groups of countries: Evidence from EU-SILC

The dynamics of income poverty in European countries have been extensively analysed using the ECHP dataset, run from 1994 to 2001 in the ‘old’ fifteen member states. Using EU-SILC longitudinal data, the purpose of this paper is to update this type of analysis to 2006 by including the ‘new’ EU member states and focusing on poverty mobility. The demographic and economic events associated with households falling into or exiting poverty are analysed through both descriptive analyses and logit regressions. The analysis compares six groups of countries clustered according to welfare regime typologies. The results reveal that most poverty transitions are associated with economic events, but the entry rates after the occurrence of demographic events are also crucial. With respect to poverty entry rates, differences among groups of countries are consistent with their welfare regime typologies, but a less clear ranking among them emerges when considering poverty exit rates and when regressions are estimated while controlling for household characteristics.

Poverty Dynamics in Clusters of European Union Countries: Related Events and Main Determinants

So far the dynamics of income poverty in European countries has been analysed in a comparative perspective using the ECHP dataset, the first EU-scale panel survey ran from 1994 to 2001 in the “old” 15 member states. By means of the EU-SILC longitudinal data, the main purpose of this paper is to up-to-date such kind of analysis up to 2007 and to extend it including also the “new” EU member states. Being the time span covered by EU-SILC too short for carrying out survival analysis on poverty duration and recurrence, in this paper we focus on income poverty mobility only, identifying and analysing which are the main determinants associated to households’ fall into or exit from poverty. Analyses are carried out grouping EU countries in the five usual geographical clusters. The results show that events related to the labour market are the most important in all clusters both because of their frequency and their relevant impact on poverty transitions Demographic events are, on the contrary, everywhere, much less relevant.

Assessing students’ equality of opportunity in OECD countries: the role of national- and school-level policies

ABSTRACT This article analyses the relationship between equality of opportunity and the characteristics of the educational system, jointly considering country- and school-level policies. Because school social environment represents a fundamental channel in shaping educational opportunities, we consider all policies, recorded in PISA 2012 dataset, that affect the sorting of students to schools. We show that including sorting policies enriches the explanation of the socio-economic gradient, that is, the association between students’ performances and parental background, with respect to previous studies including only country-level features. The negative impact of early tracking on equality of opportunity is overvalued without including other sorting policies, while grouping students’ within-school by ability increases the socio-economic gradient and a greater students’ heterogeneity in the school reduces the gradient.

The Channels of Intergenerational Transmission of Inequality: A Cross-Country Comparison

Family background can influence offspring earnings in two ways: conditioning their educationalattainments (indirect effect) and circumscribing their opportunities in the labour market, independentlyfrom their educational attainment (direct effect). In this paper, following a multi-steps strategy, wedisentangle direct and indirect mechanisms analysing the association between background and several offspringsoutcomes (education, labour market achievements, earnings) and taking into account the attainmentgot in the previous step. We compare 8 EU countries - Germany, France, Spain, Italy, UK, Ireland,Denmark and Finland -, in order to assess whether their very different performances about intergenerationalinequality could be related to different roles played by indirect and direct influences of family backgroundon children outcomes in various stages of their lives.

Tendenze e caratteristiche della disuguaglianza dei redditi: le ragioni della predistribution

Tendenze e caratteristiche della disuguaglianza dei redditi: le ragioni della predistribution La disuguaglianza nei redditi pone problemi a causa della sua ampiezza e delle sue caratteristiche. In questo lavoro si presenta inizialmente l’evidenza empirica sull’andamento della disuguaglianza dei redditi disponibili nei principali Paesi Ocse, distinguendo il ruolo delle disuguaglianze di mercato e dell’azione redistributiva pubblica. Successivamente, si discutono, da un lato, le ragioni per cui una politica di contrasto della disuguaglianza basata esclusivamente su interventi redistributivi potrebbe essere insufficiente, ancorche necessaria, e, dall’altro, le potenzialita della predistribution, cioe di misure dirette a prevenire il formarsi della disuguaglianza nei mercati, agendo sia sulle dotazioni individuali, sia sulle regole di funzionamento dei mercati.