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21 January 2011, ETUI, Brussels

ETUI Monthly forum - Inequalities in the European Union

Speakers:

Maurizio Franzini, Sapienza University of Rome & Criss

Tomas Korpi, Swedish Institute for Social Research, Stockholm University

Discussant:

Karl Pichelmann, DG for Economic and Financial Affairs, European Commission

Briefing:

Changes in the world of labour have played an important role in the recent dynamics of income inequality in almost all European countries. While not denying that skill premiums and human capital are important sources of inequality, Maurizio Franzini will draw attention to a largely neglected aspect: the high level of inequality within groups of individuals, homogeneous in terms of formal skills and education attainment, which seems much more important than inequality between people of different education. Searching for the origins of such a high level of "within" inequality, he will suggest that a major role is played by the type of contract one has access to and, at least in some countries, by the economic conditions of the parental family. These findings pose new challenges to the best policies for reducing both inequality and its persistence across generations.

The second presentation, based on a recent ETUI Policy Brief (6/2010), will recall another widely disregarded finding of earlier research: inequality can be split up into a longer-term and a short-run component. Inequality is higher, all else equal, if individuals' short-run earnings fluctuations are larger. Tomas Korpi will set out the empirical evidence on trends in short-term income variability, concluding that temporary earnings fluctuations have risen noticeably in many countries over time. This increase is traced back to a number of possible explanatory factors, each with different implications for policy.

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