Labour market segmentation: The economic condition of self-employed professionals in Italy and Argentina

Abstract

This article focuses on the conditions of professional self-employed in the European and Latin American labour markets, whose increase is linked to the expansion of the on-demand service economy. Moving from a critique to the traditional segmentation theory, this group of highly skilled self-employed—an expression of the upper-middle class and post-industrial work—can be considered halfway between market and hierarchy, HR internalization and outsourcing. Dealing with social inequalities, the research questions are whether the conditions of these independent professionals who are characterized, on average, by higher levels of education and who work in the advanced service sectors) are comparable to employees and whether there are similar trends in the two contexts (specifically Italy and Argentina). The article presents empirical evidence on occupational income (as a dependent variable) to measure how working condition changes when controlling for socio-demographic characteristics (as independent variables) and occupation (self-employed or employee). Income levels were compared using two datasets: EPH-INDEC (Permanent Household Survey) for Argentina and ITA-SILC for Italy. Despite the limitations due to problems of comparison in the classification of occupations, the analysis highlights differences between the two countries linked to a dissimilar expansion of the service economy, professional services and outsourcing of high-skilled competences. Moreover, within a frame of high income inequalities in self-employment, graduate independent professionals in Argentina seem to retain a stronger economic performance, while in Italy they show lower earnings than other occupations, thus suggesting an unequal labour market impact of higher education in the two countries.