LEM external seminar

October 6

Edoardo Di Porto, Sapienza University of Rome (Webpage)

Title: The Role of Industries in Rising Inequality

Abstract: A large recent literature has documented that the rise in earnings inequality increasingly occurs between firms, placing firms at the center of explanations for growing wage dispersion. This paper revisits this interpretation by asking whether what appears to be a firm phenomenon is instead driven by the industries in which firms operate and studies the role of industries in the rise of earnings inequality in Italy over the past four decades. Using administrative social security data covering the universe of private-sector employment, we decompose the growth in annual earnings inequality into between-industry, between-firm within-industry, and within-firm components. We find that more than half of the increase in earnings inequality between 1985 and 2018 occurred between industries, while only a relatively small share is attributable to growing differences between firms operating within the same industry. The increase is highly concentrated in a small number of industries and, is particularly associated with the expansion of low-paying service sectors. Using an industry-enhanced AKM decomposition, we show that the growing importance of industries is not driven by increasing sector or firm pay premia. Instead, it reflects stronger sorting and segregation of workers across industries. We also exploit information on weeks worked to distinguish changes in the rate of pay from changes in labour supply. The results show that the increasing association between low pay and low quantities of work substantially amplifies annual earnings inequality. Together, the findings point to a transformation of the employment structure in which workers have become increasingly separated across industries offering very different combinations of pay and employment opportunities

October 13

Jeanne Commault, Sciences Po Paris (Webpage)

Title: Heterogeneity in MPC Beyond Liquid Wealth: The Role of Permanent Earnings

Abstract: While MPCs are mostly known to decrease with liquid wealth, I show that they are also increasing in the permanent component of earnings. In a standard model, permanent earnings raise MPCs because they reduce the ratio of risk-free-liquid-wealth-to-risky-future-earnings, strengthening precautionary behavior. This can explain two documented facts: (i) people with high levels of liquid wealth still have significant MPCs; (ii) MPCs do not decrease with current earnings although, like liquid wealth, they increase available resources. This prediction holds in survey data. The effect is large enough to explain the stylized facts. Numerical simulations match the survey results and stylized facts.

November 3

Jordan Loper, University Clermont Auvergne (Webpage)

Title: TBD

November 10

Elsa Leromain, University of Antwerp (Webpage)

Title: TBD

November 17

Valerio Capraro, University of Milan-Bicocca (Webpage)

Title: TBD

December 1

Mariana Blanco, University of Turin (Webpage)

Title: TBD

December 15

Julien Senn, University Paris 1 (Webpage)

Title: TBD