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This paper investigates the impact of risk attitudes on the decision to become an entrepreneur. In contrast to previous research, we handle endogeneity issues relying on an instrumental variables strategy considering as a source of exogenous variation in risk aversion the early exposure to a massive earthquake. Using several waves of the Bank of Italy Survey of Household Income and Wealth (SHIW), we find that individuals experiencing an earthquake become significantly more risk averse. Second-stage estimates show that risk aversion has a significant negative impact on the probability of becoming an entrepreneur.

We empirically study the determinants of intra-household decision power with respect to economic and financial choices using a suitable direct measure provided in the 1989-2010 Bank of Italy Survey of Household Income and Wealth. Focusing on a sample of couples, we evaluate the effect of each spouse's characteristics, household characteristics, and background variables. We find that the probability that the wife is in charge is affected by household characteristics such as family size and total income and wealth, but more importantly that it increases with the difference between hers and her husband's characteristics in terms of age, education, and income. The main conclusion is that decision-making power over family economics is not only determined by strictly economic differences, as suggested by previous studies, but also by differences in human capital and experience. Finally, exploiting the time dimension of our dataset, we show that this pattern is increasing over time.

We study the joint impact of gender and marital status on financial decisions. First, we test the hypothesis that marriage represents - in a portfolio framework - a sort of safe asset, and that this effect is stronger for women. Controlling for a number of observable characteristics, we show that single women have a lower propensity to invest in risky assets than married females and males. Second, we show that the differential behavior of single women evolves over time, reflecting the increasing incidence of divorce and the expansion of female labor market participation. In particular, towards the end of our sample period, we observe a reduction in the gap between women with different family status, which can be attributed to the gradual erosion of the perception of marriage as a sort of safe asset. Our results therefore suggest that the differential behavior of single vs. married women can be explained by the evolution of gender roles in society, even after controlling for differential risk attitudes. Our empirical investigation is based on a dataset drawn from the 1989-2006 Bank of Italy Survey of Household Income and Wealth.

This paper analyzes the time allocation of Italian spouses to paid work, childcare and household work. The literature suggests that Italian husbands contribute the least to unpaid household work, relative to other European countries, while Italian women have the lowest market employment rates. We model the three different time uses simultaneously for the two spouses within each household, allowing for corner solutions and correlations in the unobservables across the system of six equations. To estimate the model we use data drawn from the 2002-03 Italian Time Use Survey, combined with earnings information taken from the 2002 Bank of Italy Survey. We conclude that Italian husbands' time allocation responds to their wife's attributes: in particular, husbands' housework time increases with the wage of their wife. On the contrary, the own wage effect is significantly negative for housework of women. Childcare time of fathers increases with own wage and with the presence of small children and this is true both for weekdays and weekends.

In the Italian public debate growing attention has been recently paid to �household impoverishment�. Subjective indicators of economic condition show that this concern reflects a common sentiment of the Italian population. On the other hand, estimates based on the Bank of Italy�s Survey of Household Income and Wealth reveal a surprising stability of income distribution in the period 1993-2002, after the sharp widening amid the 1991-92 recession. A number of possible reasons that can account for this apparent inconsistency are investigated: data deficiencies; disappointed expectations; significant distributive changes across socio-economic groups which have cancelled out at the aggregate level; higher income mobility not captured by static inequality indices.

Barriers to homeownership have traditionally been an important research and policy issue. In particular, the role of income volatility and credit constraints have been one of the main focuses in this concern. In this paper we test for the first time whether the underlying nature behind the negative effect of income uncertainty on the owner-occupancy propensities is driven by risk aversion, as it is assumed in most of the theoretical models, or on the contrary it is driven by credit constraints. The former question emerges from the plausible assumption that households facing higher income volatility are also expected to face borrowing constraints. To disentangle this puzzle, we use an unusually rich data coming from the Italian Survey of Household Income and Wealth carried out by the Bank of Italy. Our results confirm that in Italy both labor income uncertainty and credit constraints exert a significant negative effect on the probability of homeownership. Our main findings indicate that the negative relationship between labor income uncertainty and the owner-occupancy propensities are just driven by households� risk aversion, while credit constraints play no role.

In spite of relatively generous public subsidies and a reputation for high quality, only a very limited proportion of Italian families use public child care. In this paper we explore the significance of various factors on the choices made between different types of child care. In part one, we use a simulation exercise to show the impact of cost and availability on child care choices. In part two, we present the results of an explorative econometric analysis using a matched data set for 1998 from the Bank of Italy (SHIW) and ISTAT Multiscopo. We find evidence that factors related to family composition and support as well as to the characteristics of child care are important in explaining the choices made by Italian families. Assistance provided by grandmothers and husbands appears to be of crucial significance to Italian mothers who are seeking to reconcile the difficulties stemming from the rigidity of the labor market and the limitations of child care. Rationing, both of public and private child care, also proves to be an important factor affecting households� choices. An understanding of the importance of these factors is relevant in the evaluation of social policies encouraging mothers� participation in the labor market in Italy.

In this paper, we examine whether imperfections in credit markets spill over to other markets, particularly the labor market. We take the case of Italy, a country that experienced changes in the mortgage market brought about by the 1992 European unification and other institutional shifts. These events make Italy a good laboratory to study the effects of financial markets on the labor market. Using a simultaneous equation framework and household data from the Bank of Italy between 1989 and 1993, we estimate the relationship between female participation and mortgage use. We find a significant impact of mortgages on women�s participation in the labor market.

In recent years the question of overtime work has become increasingly relevant as part of the wider issue of the reduction in the working day. A direct relation between policies aiming at reducing working hours, and increases in overtime work neutralising their beneficial effects on employment, has been envisaged by those opposing such policies. We investigate this issue using microdata by the Bank of Italy. In Italy, the incidence of overtime work among male dependent workers is relatively high. In particular, we seek to ascertain if, for Italy too, the fear that a reduction in working hours could give rise to a substitution of overtime work for new jobs is legitimate. We estimate the probability of working overtime, together with equations for overtime hours of work, using different econometric models, both for cross-section (probit, tobit) and panel data (conditional fixed effects logit). Among several other variables, we control for wages and normal hours. We are particularly interested in exploring differences by sex. Overtime has always been studied over selected samples of male employees working in the private sector. Of course, focusing on workers who are most likely to work overtime will yield the result of a relatively large �substitution� effect. We show that extending the analysis to a more realistic labour market that includes female workers, this effect may become relatively modest for some specific policy measures. This result is robust across different sampling assumptions and model specifications, thus giving support to the hypothesis that the policies aiming at reducing the normal working day may have positive employment effects.

The pattern of employment among men and women has changed remarkably over the past decades. While the employment rate of women has risen, that of men has continued to decline. Disproportionate growth in the participation in the labor market of women with highincome husbands has heightened concerns that wives� earnings may increase income inequality among married couples. Questions about the implications for income distribution have also been raised, especially in countries like Italy, the UK, and the US, where more noticeable growth of income inequality during the last decade has accompanied changes in employment levels. In this paper we attempt to measure the impact of the changes of women and men�s employment patterns on the distribution of income among Italian households. Using microdata from the Historical Archive of the Bank of Italy Survey of Household Income and Wealth (SHIW), a repeated cross-sectional survey that covers the period 1977-1998, we examine the impact of employment changes on inequality in family income distribution and how this relationship has changed over time and across regions. Our preliminary results show that the increase in the employment of women during the period of observation had the effect of reducing inequality in family incomes, while the decline in men's employment had the opposite effect. The equalizing impact of wives' work on income inequality has become increasingly important over time and has been greater among Northern households. Especially since the mid-nineties, wives' earnings have reduced inequality in as much as the distribution of income would have been less equal in their absence. More conclusive results could be achieved by analyzing a more structural approach where the labor supply of husbands and that of wives are determined simultaneously.

Employment protection systems are known to generate significant distortions in firms� hiring and firing decisions. We know much less about the impact of these regulations on worker effort. The goal of this paper is to fill in this gap and in particular to assess whether the provision of employment protection induces less effort among workers in the form of absenteeism. Our analysis is based on weekly observations for the 858 white collar workers hired by a large Italian bank between January 1993 and February 1995. These workers begin to be protected against firing only after the twelfth week of tenure and we observe them for one year. We show that the number of days of absence per week more than doubles once employment protection is granted, thus confirming what is suggested by our theoretical model and what is typically assumed in the literature. We also discuss how this evidence can be used to estimate what the absenteeism rate would be in Italy if employment protection were eliminated.