Gender Employment Disparities, Financialization, and Profitability Dynamics on the Eve of Italy's Post-2008 Crisis

Abstract

This study explores aggregate profitability in Italy from 1994 to 2008 in its connection with structural change and gender employment disparities. Using decomposition analysis, the study finds that aggregate profit rate declined, but the profit share did not. Male variables -such as earnings, output, employment, and working hours -tended to have more weight than female ones in explaining aggregate outcomes. Structural change also played a major role, as the economy specialized in sectors with falling real wages and wage shares, especially the financial sector and construction. Further falls in the wage share and widening wage gaps may not guarantee a rise in profitability. This result entails that "neomercantilist" approaches to solve the crisis might only prepare the next crisis, while a coordinated expansion of demand could be more successful. Moreover, gender issues should not be neglected in terms of favoring women's employment and entrepreneurship.

Gender Wage Gap, Wage-Productivity Decoupling, and the Rate of Profit

“…They use a decomposition methodology to separate the effects of the trends in women's employment and wages on the labor share and the rate of profit. Tescari and Vaona (2014) perform a similar decomposition analysis to Zacharias and Mahoney (2009) of the wage share and rate of profit for the Italian economy for 1994-2005 and find similar patterns. Finally, Elveren, Marr, and Renard (2017), using panel data for twenty-one OECD countries from 1970-2008, find evidence supporting the idea that higher women's labor force participation rates and GWG lead to higher profit rates.…”

Panel Data Analysis of the Effects of Female Labor Force Participation on Profit Rates

“…A few studies have engaged with the effects women's employment on profitability. Both Zacharias and Mahoney (2009) and Tescari and Vaona (2014) found a positive impact of women's employment on wage share in the US from 1982-1997and Italy from 1994, respectively. Moreover, both Finnof and Jayadev (2006 for 23 OECD countries for 1975-2000and Elveren et al (2017 for 21 OECD countries for 1970-2008 showed that FLFP leads to increasing profit share and profit rate, respectively.…”