Characterizing Cohort Patterns for Italian Wages

In this paper we characterize inter-generational and intra-generational patterns of earnings for Italian dependent workers for the period 1984-1995. Using data from the Bank of Italy’s Survey of Household Income and Wealth, we construct cohort specific age profiles for mean wages (the measure of central location here adopted) and for the 90-10 percentile differential (the inequality measure); we estimate the age profiles for three categories of workers, which differ for educational attainment; we verify how different cohorts have been doing comparatively and finally we test whether, with time, the (mean) returns to experience and education have increased. Moreover we verify how the inequality measure has changed with time and across cohorts. Our results indicate that for the three groups considered each successive generation, with the exception of those that entered the labor market in the years 1993 and 1995, have benefited from higher entry wages. At the same time we find that the age profiles for the two groups with lower education have become flatter so that we cannot conclude that more recent cohorts of middle and low educated workers are better off than their immediate predecessors. Finally we find that inequality tends to increase with age, while across-cohort variation does not seem to be very significant. JEL Classification: J31