Essays on Economic Inequalities

This work relates to income inequalities studied from two different perspectives: ICT innovation (Chapter 1-2) and bargaining among social groups (Chapter 3-4). ICT innovation affects the number of jobs but also the structure of the labor market, with important consequences on income distribution. ICT innovation could destroy more jobs than it creates, for the first time since the beginning of industrialization; meanwhile the advanced ICT softwares are reducing that professions typically associated with the middle class, in favor of those that lies to the extremes of pays. On the other hand, the ability of each social group to attract resources is a second source of movements in income distribution; in particular, bargaining can take place within each company (firms versus trade-unions) and within the government (political parties competing to impose welfare regime). In Chapter 1 we estimate the effect of internet revolution on the number of jobs. The fourth industrial revolution, which began with the rise of internet technology, is now seeing the development of increasingly sophisticated artificial intelligence software. One consequence of such development is the ever-more serious risk posed for jobs. Chapter 1 shall examine this phenomenon in three steps; first, we shall empirically show that productivity growth over the last two decades was led by ICT; secondly, we shall discuss whether these productivity gains have affected the structure of employment by examining the data coming from 16 OECD countries and how such outcomes may be linked to innovation in ICT. Finally, a forecasting logistic model on the evolution of employment will be provided, projecting that by 2040-50 unemployment and atypical forms of work will affect 60% of the workforce in most of the countries observed. In Chapter 2 we observe the structure of job market over the last 25 years in order to find which professions have expanded and which ones have reduced and then we link this outcome to middle class thinning and the consequent income inequality growth. The underlying hypothesis is that ICT innovations are changing job structures, at least in the most industrialized countries. Firstly, this chapter takes the studies of Acemoglu and Autor (2010) and Goos et al. (2009) as a starting point and then updates their results for 16 European countries. The outcome we have found is an accentuation of the dynamics already observed in the literature. On the one hand, the number of non-routine jobs has increased while routine ones (both skilled and non-skilled) have become fewer; on the other hand, while the number of both low-paid and high-paid jobs has risen, those with average compensation have fallen almost everywhere. The consequence is a progressive thinning of the middle class and a change in income distribution among Western populations. Secondly, Chapter 2 links these findings with the recent intensification of the populist phenomenon. We shall be discussing an original theory, consistent both with the literature and with the empirical evidence, which describes the populist origins and its future prospects. In Chapter 3 shift our consideration to the social dynamic of inequalities. Income inequalities increase and decrease according to the capability of each social group in appropriating the national added value. The final outcome of this partition may be seen reflected on the price level. The lasting debate about the origins of inflation has determined two opposing approaches: monetarism and bargaining. The aim of Chapter 3 is to put these aspects together in an innovative synthesis. To investigate this item, we used an Input-Output (IO) approach and we developed an original mathematical process to define the real price index variations. After that, we tested this theoretical definition with an empirical study on Italian inflation over 30 years where we elaborated 31 official I-O tables compiled by the Italian statistics bureau (ISTAT). By this verified definition, inflation is strictly due to the level of wages and profits. This level, in turn, depends both on monetary government intervention (monetarist approach) and on collective bargaining among trade-unions and stakeholders (classic bargaining approach). Finally, by this model, theoretical implications are derived and summed up in six different settings ceteris paribus. Finally, in Chapter 4 we link income inequalities to Health Systems in a European perspective. With a sociological slant, we compare European countries in the context of neoliberal era, focusing on healthy life years for elderly (HLY65+). Firstly, we outline the theoretical state of the art in the literature on health inequalities, stressing the important relationship that links health inequalities to geographic area. In the second part of Chapter 4 we observe data relating to the changes of HLY65+ in the European member states and we correlate these results with the income inequality measured by the Gini index. The last part of Chapter 4 advance some comments on health inequalities in the context of the neoliberal era and in relation to geographic place and welfare policies.