Labour supply and employment probabilities in Italy: a gender analysis in a regional perspective

This paper analyses the effect on employment and labour supply probabilities of individual (age, education), household (age and number of children, income, partner’s employment condition) and labour market status variables. The aim is to understand how labour supply and employment probabilities in Italy differ by gender and by regions. Therefore married women’s and married men’s employment and participation probabilities are analysed at national level and by macroareas. The microdata used is the 1995 Bank of Italy Survey on household income and wealth. The analysis by gender highlights the expected discouraging effect of children on their mothers’ labour supply and a higher effect of education on married women’s labour supply. The estimation of the same model on different regions shows higher differences across regions for women’s labour supply behaviour than for men. Tests for added versus discouraged worker effects are provided by areas and by gender. At national level, married women’s labour supply is significantly lower if regional unemployment rates are higher, at regional level there is evidence in favour of the added worker effect only for married women who live in the South West of Italy. Previous analyses on women’s labour supply in Italy show higher participation rates for women with a higher level of education; our analysis is consistent with this research and shows a different labour supply behaviour for married women by education level. The discouragement effect of the presence of children in the family on their mother’s labour supply is not significant for graduated married women’s labour supply. The 1995 survey also contains information on the individuals’ perception of their employment probability in the following 12 months, and this enables expected employment probability to be estimated and to be used to estimate a dynamic model of labour supply.