The Gender Wage Gap in Italy

Abstract

The paper estimates the gender wage gap in Italy, taking into account two salient features of the economy: the low rate of women’s labour market participation and the high share of self-employment. It exploits the Bank of Italy’s survey on household income and wealth, which contains information making it possible to control for several socio-economic characteristics and provides valid exclusion restrictions for the choice of working versus not working and for the choice of salaried employment versus self-employment. The wage gap is found to be increasing over time; in 2008 it was equal to 13 per cent. The paper also exploits newly available data from the Eurostat Structure of Earnings Survey to investigate to what extent the performance-pay component of the wage (i.e. bonuses) explains the total gap. Both the overall gap and that in bonuses are found to be significant, even for workers with the same occupation in the same firm. However, the contribution of the gap in bonuses to the overall gap is negligible, given the small share of bonuses in total earnings.

Keywords: female employment, occupational choice, performance pay, productivity

JEL Classification: J16, J30, J71