Matteo Targa

M. Targa;  Are “good” firms, good for all employees? An Investigation of Firm Fixed Effects at the Occupational Level.

Currently submitted. Latest Version

Abstract: This paper investigates whether employers share rents equally between white-collar and blue-collar workers. Using bias-corrected methods on administrative data from Italy’s Veneto region, I reject this null hypothesis. This finding has three main consequences. (1) High-type firms are not equally beneficial for all employees: half of the top 20% of firms for white-collar workers fall within the bottom 60% of the blue-collar distribution. (2) Recognizing this heterogeneity is important for accurately measuring worker-firm assortative matching. (3) Firm premium differentiation has a long history: employers steadily decreased rent sharing with their blue-collar workers since the late 1980s.

J. König, M. Longmuir, J.Seebauer, M. Targa; The Scarring Effects of Firm Shutdowns on Workers’ Wages: A Distributional Perspective

Latest Version

Abstract: To shed light on the differential impact of firm shutdowns across the distribution of workers, we adopt the wage determination framework of Bonhomme, Lamadon, and Manresa (2019) to uncover workers’ unobserved types. Worker types relate to workers’ position in the wage distribution: all else equal, a higher type implies higher wages. We use the universe of social security records of Italy’s Veneto region, one of the leading Italian regional economies, from1975 to 2001. Based on this rich matched employer-employee data, we measure wage losses after firm shutdowns for different worker types using an event-study framework. Aggregate wage losses directly after a shutdown are 4.5% of the daily wage, which almost halves after six years. This aggregate trajectory masks stark heterogeneity: top-type workers face initiallosses of 12.4%, which remain persistent even after six years. Conversely, initial losses forbottom-type workers are 2.6%, which become statistically insignificant after six years. We identify losses in firm tenure as the main source of wage reductions following the shutdownof a worker’s firm. Finally, we show that the AKM model (Abowd, Kramarz, and Margolis, 1999), the current workhorse model of wage determination, does not capture this heterogeneity and can lead to misleading conclusions regarding the sources of wage losses 

L. Braunschweig, J. Seebauer, M. Targa;  The Role of Industries, Occupations and Firms in the Evolution of Wage Inequality

Draft availalbe soon!

Abstract: This paper examines the evolution of wage inequality in Germany from 1985 to 2020. To capture the heterogeneity in wage dynamics, we distinguish worker wages across 265 industrial sectors and four task-based occupational classes, yielding 993 industry-by-occupation cells that can be consistently observed over the 35-year period. During this time, total wage variance increased by 9 log points, with half of the rise driven by widening differences between 22 cells. These comprise either non-routine abstract workers in high-tech industries or non-routine manual workers in low-paying retail sectors. The central role of these 22 key cells in explaining the overall increase in wage inequality reflects a combination of strong employment concentration, rising polarization in relative earnings, and increased assortative matching.

M. Longmuir C. Schröder, M. Targa;  De-routinization of Jobs and the Distribution of Earnings: A Cross-Country Comparison 

Currently submitted. Earlier version available as LIS Working papers 796, LIS Cross-National Data Center in Luxembourg.  

Latest Version  

Abstract: In this study, we use a novel dataset covering 35 countries to investigate the phenomenon of job de-routinization, job polarization, and their potential ramifications on earnings distributions. We find strong empirical evidence of job polarization, but no systematic link between job polarization and the distribution of earnings. We show that this missing link stems from the fact that occupational classes are not very strongly stratified along the earning distribution.

M. Targa, L. Yang;  The Impact of Communist Party Membership on Wealth Distribution and Accumulation in Urban China

World Development, Volume 181, September 2024 - Link

Media Coverage: The Economist (July 8th 2023), Stanford Center on China’s Economy and Institutions (January 15, 2025)

Abstract: In the context of China, there is growing interests among economists and other social scientists in measuring the economic returns of Chinese Communist Party (CCP) membership. Existing literature mostly focuses on the estimation of returns of party membership on labour wages and earnings. In this paper, we aim to fill the gap in the literature by presenting the first comprehensive study about the wealth gap evolution in urban China between CCP and non-CCP households since the 1990s. We apply unconditional quantile regression (UQR) to describe the heterogeneity in the returns of party membership along the wealth distribution. Our results show that the \textit{average} wealth gap between CCP and non-CCP household remained substantial and stable between 1995 and 2017; however, the returns structure of political membership has deeply changed over time. While in the 1990s the highest wealth advantages, in relative terms, for party members were concentrated at the middle of the distribution, today is the lower class that benefits the most. We show that privatization of the housing market, especially after the housing reform, granted even access to housing wealth to both CCP and non-CCP families, reducing the differences in the middle and at the top of the wealth distribution. However, strong differences between the housing investment of CCP and non-CCP households at the bottom of the net wealth distribution persist still today, where CCP are found a) to be more likely to own housing real estate assets than non-CCP households and (b) the houses that they own are more valuable. Eventually, using a balanced household panel from 2013 to 2017, we are able to trace wealth accumulation at the household level. Our findings show CCP households accumulate wealth faster than non-CCP ones due to larger capital gains, and such differences are increasing along the net wealth distribution.

J. Adriaans , M. Targa;   Gender Differences in Fairness Perceptions of Own Earnings in 28 European Countries.

Published in European Societies (2022), 1-25. 

(Limited) free download version available.

Abstract: Women tend to evaluate their own pay more favorably than men. Contented women are speculated to not seek higher wages, thus the ‘paradox of the contented female worker’ may contribute to persistent gender pay differences. We extend the literature on gender differences in pay evaluations by investigating fairness evaluations of own earnings and underlying conceptions of fair earnings, providing a closer link to potential subsequent wage demands than previous literature. Using European Social Survey (2018/2019) data, we find no evidence that women evaluate their own earnings more favorably than men. In 15 out of the 28 analyzed countries, women actually report more intense levels of perceived unfairness. Studying fair markups on unfair earnings, i.e. the relative distance between the earnings received and earnings considered fair, we find that women report the same, if not lower, fair markups compared to men in most countries; thus indicating limited potential for perceived unfairness as a driving force to reduce the gender pay gap in Europe.