Following the literature on micro-classes that states that mechanisms of social immobility are related to specific features of each occupational group, we will focus on top occupations - namely, liberal professionals and politicians - and assess the Italian case, also through international comparisons, with three aims:
i) inquiring whether those coming a better background, especially children of parents who performed their same job, are more likely to achieve these top occupations;
ii) observing whether, within the small subgroup of advantaged individuals performing top jobs, those coming from a better background are further advantaged by higher earnings;
iii) exploiting changes in professionals' earnings after liberalizations or institutional changes, to identify whether earnings differences within top groups depend on unobservable abilities background related or are also affected by the social ties, i.e. by nepotism, thus questioning markets efficiency over the absence of effective equality of opportunity.
On these issues, the current literature has two major limits: i) it focuses on the achievement of prestigious jobs (on belonging to various micro-classes), without inquiring whether "within prestigious jobs" earnings gaps benefitting those coming from a better background emerge; ii) it is not able to identify sources of possible earnings gaps background-related, i.e. if they depend on informal transmission of human capital from parents to children or on social connections. We will clearly advance with respect to both issues, investigating earnings gaps background-related within individuals performing top jobs and identifying the source of these possible gaps for some workers¿ subgroups (i.e., lawyers and politicians), thus distinguishing effects due to background-related abilities or to social connections. Furthermore, new empirical evidence about social immobility and intergenerational inequality in Italy and major developed countries will be provided.
The project will improve the current state of the art of the literature on intergenerational inequality from several points of view. Specifically, new empirical evidence about social immobility and intergenerational inequality in Italy and major developed countries will be provided. Furthermore, mechanisms behind social immobility and intergenerational inequality will be investigated to distinguish effects due to background-related abilities or to social connections.
On these issues, the current literature has two major limits: i) it focuses on the achievement of prestigious jobs (on belonging to various micro-classes), without inquiring whether "within prestigious jobs" earnings gaps benefitting those coming from a better background emerge; ii) it is not able to identify sources of possible earnings gaps background-related, i.e. if they depend on informal transmission of human capital from parents to children or on social connections. We will clearly advance with respect to both issues, investigating earnings gaps background-related within individuals performing top jobs and identifying the source of these possible gaps.
More in detail, we will make use of national and international datasets to measure the degree of association between parental characteristics and children probability to achieve a certain profession and analyse the association between parents' characteristics and children earnings within that profession. The analysis will primarily focus on the case of Italy exploiting a dataset built merging cross-sectional waves 2005 and 2011 of IT-SILC - where retrospective information about parents' characteristics are recorded - with detailed longitudinal records on the whole working career of individuals interviewed in IT-SILC by making use of INPS administrative archives that cover all Italian workers (employees, self-employed and professionals, distinguished according to the professional body where they are enrolled). We will thus be able to link parents' characteristics and occupation to the probability of children to achieve certain top occupations and, within each occupation, the association between parentsì' characteristics (e.g. having been employed in the same job) and children earnings.
International comparisons will be carried out by making use of longitudinal data for other countries - PSID for US, GSOEP for Germany, BHPS for UK - and also by making use of cross-sectional 2005 and 2011 waves of EU-SILC, where parents' and children occupations are recorded according to the 2-digit ISCO. When comparing countries, the association between the parental background effect and the national economic context, summarized by the OECD PMR index, will be also inquired to assess whether country performances are related to market regulation.
A more robust analysis of mechanisms behind the intergenerational transmission process will be carried out for the case of Italian lawyers, exploiting an original dataset developed by Michele Raitano in collaboration with Cassa Forense (the pension fund for lawyers). This dataset merges longitudinal administrative information on lawyers' earnings with answers to a questionnaire where several questions about parents¿ characteristics are recorded. Exploiting the occurrence of liberalization reforms in the lawyers' sector in Italy, we will carry out a diff-in-diff to assess whether earnings gaps advantaging lawyers' children are related to occupation-specific skill transfer or to nepotism. Being aimed at increasing competition, the liberalization, if it is effective, should allow more able lawyers to earn more and reduce room for nepotism, decreasing rents related to social ties. Therefore, we can analyse whether the liberalization differently affected lawyers coming from different backgrounds to identify networks vs specific skills effects. Indeed, if the advantage for lawyers' children is related to better unobservable abilities we should find an increase in their earnings after the liberalization; on the contrary, if it is mainly related to nepotism we should find a decrease in earnings of lawyers' children after the liberalization.
Finally, following suggestions by Gagliarducci and Manacorda (2017) who focus on earnings gaps between employees who are sons of politicians, we will focus on the case of Italian politicians to assess the intergenerational persistence in this particular job. Making use of historical data about elections at national and subnational levels, we will build a dataset recording politicians intergenerational links since the `50s in Italy to measure the evolution over time of the persistence in this job. Furthermore, we will exploit institutional changes about the electoral rules and the wages paid to politicians to assess mechanisms behind this association, e.g. analysing whether the intergenerational persistence increases when politicians earnings rise, consistently with the existence of a certain degree of nepotism.