Youth Unemployment and Retirement of the Elderly: the Case of Italy

This paper shows that the “lump of labor” assumption fails in Italy. The direct relationship between the unemployment rate of the young and the labor force participation of the old is pro-cyclical, i.e. a higher labor force participation of the old is related to a lower unemployment rate of the young. Hence both vary with the business cycle. In order to overcome endogeneity problems in explaining unemployment of the young, we resort to a simulated variable: “the inducement to retire”, which is constructed by simulating the social security benefits. We related the unemployment rate of the young to this incentive measure and find that a higher inducement to retire is associated to a higher unemployment rate – quite the opposite of the “young-in-old-out” story.lump of labour, youth unemployment, early retirement

An Empirical Micro Matching Model with an Application to Italy and Spain

A large literature investigates the role of frictions in explaining labour market dynamics. Their presence is often summarized by an aggregate matching function relating the number of job matches to total unemployment and total vacancies. Most empirical specifications, however, are only reduced forms with no micro-foundation. Further, for many countries, empirical research on the matching function cannot be carried out because data on vacancies are simply not available. This paper looks at a job match as a transition from non-employment to employment. This transition is decomposed into two parts, one determined by the matching technology and one by individual search intensity. We show how the micro-founded model of Pissarides (1979) can be identified using only microdata on labour market transitions. This enables us to obtain a measure of market tightness even without information on the demand side of the market. The method is then applied to estimating the Italian and Spanish matching functions using data from the quarterly labour force surveys.Matching function, market tightness, labour market transitions, search intensity

Early-life environment, eight and BMI of young adult males in Italy

This paper studies the relationship between the two main dimensions of early-life environment, namely disease burden (measured by infant mortality) and economic conditions (measured by income or consumption per capita), and height and body-mass index (BMI) of recent cohorts of young adult males in Italy. By combining high-quality micro-level data on height and weight with regional- and province-level information, we are able to link individual height and BMI at age 18 to regional and provincial averages of environmental variables in the year of birth. Our results are consistent with the hypothesis that, in rich low-mortality setting, the scarring effects of childhood disease dominate selection. We also show that both income and disease matter, and their relative importance differs depending on the outcome considered and the available background information. In particular, we find that income matters more than disease for height, while the opposite is true for BMI. Finally, using detailed province-level information, we show that income per capita is a proxy for a variety of environmental indicators that are highly correlated with economic conditions.Body height, BMI, obesity, income, infant mortality

Survey response and survey characteristics: Micro-level evidence from the ECHP

This paper presents some micro-level evidence on the role of the socio-demographic characteristics of the population and the characteristics of the data collection process as predictors of survey response. Our evidence is based on the public use files of the European Community Household Panel (ECHP), a longitudinal household survey covering the countries of the European Union, whose attractive feature is the high level of comparability across countries and over time. We use individual-level information to predict response in the next wave given response in the current wave, focusing on how the probabilities of contact failure and refusal to cooperate vary with the socio-demographic composition of the national populations and the characteristics of the data collection process. We model the response process as the outcome of two sequential events; (i) the contact between the interviewer and an eligible interviewee, and (ii) the cooperation of the interviewee. Our model allows for dependence between the ease of contact and the propensity to cooperate, taking into account the censoring problem caused by the fact that we observe whether a person is a respondent only if she has been contacted.Panel data, survey response, bivariate probit model.

Posterior moments and quantiles for the normal location model with Laplace prior

We derive explicit expressions for arbitrary moments and quantiles of the posterior distribution of the location parameter eta in the normal location model with Laplace prior, and use the results to approximate the posterior distribution of sums of independent copies of eta

Earnings Inequality in International Perspective

The increase in dispersion of personal earnings in the USA has received considerable attention and has been analyzed extensively. The evidence for other countries is less systematic. There are a few comparative studies, but they tend to focus on descriptions of the overall distribution of income or earnings. This paper compares the USA with other countries in order to understand whether the US experience is relatively unique or is instead part of a global (or perhaps industrial countries) phenomenon. The paper is mainly descriptive and relies on the empirical evidence from the micro-data of the Luxembourg Income Study (LIS), spanning a period of about twenty years from the mid 1970s to the mid 1990s. It focuses on personal earnings, as opposed to personal or household income, and looks at two main determinants of the changes in the distribution of earnings at the aggregate level, namely changes in between-group and within-group dispersion, as well as the relationship between changes in relative wages and in relative employment. Grouping of the population is based on gender, age and educational attainments. Our main empirical finding is that most of the stylized facts known to hold for the USA also hold for a large majority of the countries included in the LIS database. Therefore, far from being unique, the US experience appears to be part of a phenomenon that is common to many developed countries