An Empirical Analysis of Wage Differentials in the Italian Cultural and Creative Sector

Abstract

The Cultural and Creative sector (CCS) in Europe has a large and increasing weight. However, work in the CCS is widely perceived to have peculiar characteristics, like a high degree of precariousness, employment discontinuity, and low remuneration levels. This research aims to verify whether Italian cultural and creative professionals experience a wage penalty and to understand which factors might explain it. After discussing what constitutes the CCS, what are the statistical frameworks used to measure employment in the sector, and the issues related to it, we first review three theories that may account for the presence of wage differentials: the field-of-study mismatch and the accompanying sectoral saturation; the presence of compensating differentials and non-pecuniary remuneration; the influence of trade unions. We then carry out an empirical analysis based on the Italian 2019 Labor Force Survey, showing through a quantile regression that Italian cultural and creative workers do experience a wage penalty, controlling for a rich vector of observable characteristics (demographics, education, socio-economic status, and various factors representing the occupation). We find support for the hypothesis that a preference for creative fulfillment may lead to the acceptance of lower wages. Finally, we refine a previous measure of field-of-study mismatch and saturation, focusing on highly educated workers and a sharper definition of CCS.