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Timely Indicators for Labour Income Inequality

In this paper I propose a methodology for obtaining timely indicators for labour income inequality using the Italian Labour Force Survey (ILFS), a database which collects detailed information not only on individuals’ labour market status, but also on their households and wages. I develop a framework to estimate household labour income and I use it to construct timely indicators of the labour income distribution, to be used as complements to the standard and richer information provided by the household income surveys, like the Survey on Household Income and Wealth (SHIW) and the EU Statistics on Income and Living Conditions (EU-SILC). I discuss the assumptions and measurement issues underlying the proposed methodology and show that the ILFS-based Gini index closely tracks those calculated on standard household income surveys. The proposed measure is then a tool for monitoring the evolution of labour income inequality following labour market adjustments.