ABSTRACT
The performance of a country is more often evaluated in terms of too high an unemployment rate than too high earnings1 inequality. The technological decisions of the firms in developed countries have been held responsible for the employment rate, but their impact on earnings dispersion is much less debated. By the same token, labour market regulation is alleged to move the economic system away from the macroeconomic equilibrium, as the minimum wage and the employment protection legislation (EPL) reduce labour demand and slow down the flow of the younger labour force towards employment; nevertheless, the focus is on the target for the employment rate more than on how wide earnings inequality should be tolerated. Recently, wages as well as earnings inequality has gained momentum – almost to the same extent of employment and unemployment rates – not only on equity but also on efficiency grounds, as the firms’ production process is considered a co-determining factor in the evolution of pay disparities.2
