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Wage Inequality, Employment Structure and Skill-biased Change in Italy

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  • Paolo Naticchioni
  • Andrea Ricci
  • Emiliano Rustichelli

Abstract

This paper investigates empirically the relation between wage inequality, employment structure, and skill-biased change in Italy between 1993 and 2004. Applying quantile decomposition analysis, we point out that changes in wage inequality are mainly driven by a decrease in educational premia over time, whereas changes in employment structure play a negligible role. This evidence suggests that changes in wage inequality in Italy can hardly be interpreted in terms of a skill-biased change, and the evidence is further reinforced by a set of descriptive statistics showing that the increasing educational attainments of the workforce might have been crowded out by a stable trend in the demand for skills. Copyright 2008 The Authors. Journal compilation CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd. 2008.

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Bibliographic Info

Article provided by CEIS in its journal LABOUR.

Volume (Year): 22 (2008)
Issue (Month): s1 (06)
Pages: 27-51

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Handle: RePEc:bla:labour:v:22:y:2008:i:s1:p:27-51

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References

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  1. Alessia Matano & Paolo Naticchioni, 2008. "Trade and wage inequality: Local versus Global comparative advantages," Working Papers - Dipartimento di Economia 6-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2008.
  2. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, MIT Press, vol. 124(2), pages 843-881, May.
  3. Massimiliano Bratti & Nicola Matteucci, 2005. "Is there skilled-biased technological change in Italian manufacturing? Evidence from firm-level data," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 48(1-2), pages 153-182.
  4. Lilla Marco, 2005. "Disuguaglianze salariali in Italia: nuove evidenze dai microdati SHIW," Politica economica, Società editrice il Mulino, issue 1, pages 71-102.
  5. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
  6. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
  7. Barth, Erling & Lucifora, Claudio, 2006. "Wage Dispersion, Markets and Institutions: The Effects of the Boom in Education on the Wage Structure," IZA Discussion Papers 2181, Institute for the Study of Labor (IZA).
  8. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," Harvard Institute of Economic Research Working Papers 2096, Harvard - Institute of Economic Research.
  9. Paola CASAVOLA & Andréa GAVOSTO & Paolo SESTITO, 1996. "Technical Progres and Wage Dispersion in Italy: Evidence from Firm's Data," Annales d'Economie et de Statistique, ENSAE, issue 41-42, pages 387-412.
  10. Melly, Blaise, 2005. "Decomposition of differences in distribution using quantile regression," Labour Economics, Elsevier, vol. 12(4), pages 577-590, August.
  11. Peracchi, Franco, 2006. "Educational Wage Premia and the Distribution of Earnings: An International Perspective," Handbook of the Economics of Education, Elsevier.
  12. repec:rtv:ceiswp:215 is not listed on IDEAS
  13. Gary Burtless, 1995. "International Trade and the Rise in Earnings Inequality," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 800-816, June.
  14. Brunello, Giorgio & Miniaci, Raffaele, 1999. "The economic returns to schooling for Italian men. An evaluation based on instrumental variables1," Labour Economics, Elsevier, vol. 6(4), pages 509-519, November.
  15. repec:rtv:ceiswp:260 is not listed on IDEAS
  16. Andrea Brandolini & Piero Cipollone & Paolo Sestito, 2001. "Earnings Dispersion, Low Pay and Household Poverty in Italy, 1977-1998," Temi di discussione (Economic working papers) 427, Bank of Italy, Economic Research and International Relations Area.
  17. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
  18. Paolo Naticchioni & Andrea Ricci & Emiliano Rustichelli, 2010. "Far away from a skill-biased change: falling educational wage premia in Italy," Applied Economics, Taylor & Francis Journals, vol. 42(26), pages 3383-3400.
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Citations

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Cited by:
  1. Bosio, Giulio, 2009. "Temporary employment and wage gap with permanent jobs: evidence from quantile regression," MPRA Paper 16055, University Library of Munich, Germany.
  2. de Oliveira Cruz , Bruno & Naticchioni , Paolo, 2012. "Falling urban wage premium and inequality trends: evidence for Brazil," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 24, pages 91-113.
  3. Davide Antonioli & Paolo Pini & Rocco Manzalini, 2011. "Innovation, Workers Skills and Industrial Relations: Empirical Evidence from Firm-level Italian Data," Working Papers 201106, University of Ferrara, Department of Economics.
  4. Ana Karina Alfaro & José Javier Núñez Velázquez, 2010. "The Spanish technnical change: A regional and a dynamic analysis (1994-2007)," Alcamentos 1002, Universidad de Alcalá, Departamento de Economía..

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