Massimiliano Bratti (University of Milan, CHILD (Turin), IZA (Bonn) and WTW (Milan).) Nicola Matteucci () (Marche Polytechnic University and MERIT-University of Maastricht)
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The bulk of the literature on the Skill-Biased Technological Change (SBTC) hypothesis has focused on the US and the UK, while evidence on other countries is ‘mixed’. We use firm-level data to test for the presence of SBTC in Italian manufacturing. The interest stems from the fact that Italy is a “late comer” country, suffers a gap in new technologies and has a ‘rigid’ labour market. We estimate employment-share equations using as a skill-ratio two alternative measures, the ratio between white collars and blue collars (WC/BC) and that between graduates and non-graduates (G/NG). We find an unconventional evidence supporting SBTC. First, with the most traditional indicator (WC/BC), a significant effect of R&D is only found when the latter is disaggregated by destination: SBTC mainly runs via process-oriented R&D. Instead, a significant impact of R&D on the skill-ratio is always uncovered with G/NG. Further disaggregations confirm that the impact of R&D is mainly due to incremental process-oriented activities. These results can be easily reconciled with the structural characteristics of Italian manufacturing, where traditional sectors and small and medium sized firms prevail, innovative activities are mainly incremental and the capacity to absorb skilled labour rather limited.
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Find related papers by JEL classification: J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
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