Characterizing Life-Cycle Dynamics of Annual Days of Work,Wages, and Cross-Covariances

This paper investigates the dispersions in days worked and wages by adapting a novel semi-parametric specification that minimizes assumptions about life-cycle labor income dynamics. Data for Italy shows substantial increase inequality after age 50 males over time span from 1985 to 2012, which is remarkably driven variations rather than wages. Results show this determined permanent changes number of worked. I also introduce an empirical strategy decompose cross-covariances working quantify transitory responses wage shocks. A one-percent increases 0.8% at 28, while 0.3% 55. Despite strong reaction work shocks early careers, correlation coefficients are small, indicating only small share variation – shapes explained