Activity report of visit to InGRID
research infrastructures
Please limit the report to max. 3-5 pages, including tables and
figures and use the following structure as much as possible.
Name and last name
Gennaro PUNZO
Project title
Profiles of inequality and social vulnerability for sub-groups of population: Evidence
from European countries
Sub-title:
A comparison between Hungarian and Italian labour market
Abstract (max 300-500 words)
For at least five years the global economic crisis has been producing strong repercussions on
income distribution and inequality in practically all European countries which have been paying a
heavy price in terms of job loss or reduced working hours. However, the impact of the recession on
employment, earnings, social and economic inequalities widely varies in Member States; even in a
same country, workers differently suffer their precarious socio-economic situation. In some
European States, the effective use of policy instruments by the Government or other social
institutions helps to ease the burden on working families; active labour market policies prove their
worth in specific concrete contexts even though their effectiveness should be strengthened in
relation to the key factors acting on job loss or income reduction.
In this field, the research, drawn upon the EU-SILC data, is carried out in a longitudinal
persperctive in order to investigate the income dynamics during the first years of the global
downturn and stagnant economic growth. More precisely, in the light of each national socioeconomic framework and redistributive policies, the econometric analysis deals with the
fluctuations in individual gross earnings from 2007 to 2010 for a selected set of Mediterrean
(Greece, Italy, Portugal and Spain) and Eastern (Czech and Slovak Republics, Hungary and Poland)
European countries. The study treats working-age individuals, employees and self-employed,
irrespective of their activity sector, aged 18-65, who have been successfully and continuously
interviewed from 2007 to 2010, and explores the main determinants of changes in the distribution
of their employment related earnings adjusting for the economic growth, inflation, technological
progress and other structural aspects which differently characterize each country.
Knowing the main driving forces of income changes over time and finding out inequalities in
the trend of work remuneration also within sub-groups of workers may help the political decisionmakers in the design of redistributive measures and in the evaluation of their impact on welfare.
The choice as period of investigation of the first years of the global economic recession, whose
effects are still having a continued influence, allows to provide clues on the role of different
patterns of income changes in affecting the national economic structures in the light of socioeconomic backdrop of uncertainty characterizing Europe during the outbreak of the crisis. In
particular, the changes in employment status (employee vs self-employed and vice-versa),
employment contract (full time vs part-time or permanent vs fixed-term contract) rather than other
labour market functionings are widely discussed as the main determinants of partial fluctuations in
the structure of personal incomes. In addition, decomposition analyses permit evaluating how
much of income changes between countries is accounted for by the dissimilar endowments in
characteristics rather than the different ways through which the national labour systems transform
these characteristics into changes. Alternative decomposition methodologies are also tested in a
longitudinal perspective in order to disentangle income fluctuations between countries into more
components and assess the contribution of each factor to difference in outcomes.
Introduction and motivation of visit
For some time my research has been actively directing to investigate the extent to which income
inequality varies over time and how socio-economic inequalities may be transmitted across
generations. More precisely, in an extensive European perspective, I have been trying to look into
the individual characteristics and main spheres of family background as key components of labour
market decision-making process, social stratification and critical predictors of inequality within and
across generations.
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As statistician, I can easily estimate models in data analysis, make predictions and simulations,
but my knowledge is still too much lacking in sociological and more theoretical aspects of these
issues, mainly as regards to Welfare State models and social policies systems. Consequently, my visit
to Tarki Institute offered me useful insights for improving my competences to be able to
understand the impact of income determinants across countries in causing changes over time and
inequalities in the light of different welfare regimes, macro-economic or cultural contexts,
institutional settings and family policies. In particular, I received remarks into sociological and
economical aspects in order to be able to interpret, strictly and efficiently, the wider countryspecific differentials in the patterns of income distribution and inequalities, social stratification and
labour markets.
Scientific objectives of visit
My visit to Tarki Institute aimed at improving my economic and sociological knowledge for an
easier interpration of dynamics of income distribution in a cross-country comparison in the light of
different welfare regimes, institutional frameworks and social policies. The Tarki research team has
a broad experience in dealing with socio-economic characteristics in a worldwide perspective. More
precisely, I was interested to investigate the main driving forces of income changes during the first
period of global recession with a special focus on countries of Southern (especially Italy) and
Eastern Europe (especially Hungary), highlighting similarities and differences in their patterns of
income inequality. Nonetheless, I find very important to have the opportunity to share my ideas
with scholars with potential different points of view, learn and consult on comparative social
policies.
Reasons for choosing research infrastructure and datasets/surveys/...
The Tarki Institute focuses its research primarily on income distribution, social stratification and
labour market and it builds up household and enterprise panel studies. For example, the Tarki Data
Archive collects a great number of surveys for the social science at national and international level.
In particular, the Tarki Household Monitor Survey, a continuation of the Hungarian Household
Panel Study, analyzes the changes in the stratification of society and social inequality with issues
concerning the labour market, savings, economic expectations, social relations and so on.
Activities during your visit (research, training, events, ...)
Every day I worked at Tarki offices during my stay in Budapest. My research programs have been
facilitated by the availability of local datasets, integrated with EU-SILC data, by the possibility of
meeting some local researchers and experts, who for a long time have been working on this matter,
and by the free use of the library and by the opportunity of consulting the literature review on
social policy in different European countries.
Method and set-up of research
During my research visit, local researchers made the Tarki datasets and materials available to me,
giving me the possibility of analysing them. By comparing the content of the different datasets, I
decided, with the support of local experts, to use the EU-SILC (European Union–Survey on
Income and Living Conditions) panel data in order to guarantee the comparison across European
countries. Indeed, the EU-SILC project assures the international comparability by the common
framework which defines a set of harmonised target variables, recommended designs for
implementing the survey in each country, common guidelines for imputation and weighting,
universal concepts and classifications.
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Project achievements during visit (and possible difficulties encountered)
A comparison between Southern and Eastern countries of Europe is proposed in terms of income
changes and inequality during the first years of global crisis. Alternative econometric models for
panel data have widely been tested and different variants of decomposition methods have been
implemented in order to disentangle income fluctuations between countries into more components
and assess the contribution of each factor or group (i.e., employee vs self-employed incomes) to
difference in outcomes. A lot of critical methodological problems have been discussed, working
papers are currently being prepared and a plan for future works has been devised, such as
conferences where these results could be discussed.
Preliminary project results and conclusions
Preliminary findings show the crucial role of gender, education, experience in labour market and
employment status in determining changes in personal earnings over time; more specifically, the
results draw attention to the significant role of dynamic variables, such as the changes in employment
status (employee vs self-employed and vice-versa), employment contract (full time vs part-time or
permanent vs fixed-term contract) rather than other labour market functionings in shaping the
partial fluctuations in the structure of personal incomes.
The analysis through Juhn-Murphy-Pierce approach and some its variants over time provides a
more differentiated picture across countries and along the entire distribution. In the light of these
earliest findings, which also provide insights into the ways in which each single factor contributes in
changing personal earnings, alternative policy measures will be also discussed in order to implement
programmes more suited to the social, economic and cultural background of each country.
Outcomes and future studies
More than one paper co-authored by me and dr. Antonella Rocca are currently being prepared,
incorporating suggests and feedback received during our stay in Tarki.
References
AA.VV (2014), Changing Inequalities and Societal Impacts in Rich Countries – Thirty Countries'
Experiences, Edited by Brian Nolan, Wiemer Salverda, Daniele Checchi, Ive Marx, Abigail
McKnight, István György Tóth, and Herman G. van de Werfhorst, Oxford University Press.
Brewer M., Muriel M. and Wren-Lewis L. (2009), Accounting for changes in inequality since 968:
decomposition analyses for Great Britain, Government Equalities Office.
Toth I.G. (2013), Time series and cross country variation of income inequalities in Europe on the
medium run: are inequality structures converging in the past three decades? Gini Policy Paper 3.
Bourguignon F., Ferreira F.H.G., Leite P.G. (2007), Beyond Oaxaca–Blinder: Accounting for
differences in household income distributions, J Econ Inequal.
Li H., Squire L., Zou H. (1998), Explaining international and intertemporal variations in income
inequality, The Economic Journal, 108, 26-43.
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