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Wage--size relation and the structure of work-force composition in Italian manufacturing firms

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  • Giulio Bottazzi
  • Marco Grazzi

Abstract

In this paper we study the impact of firms' productivity and scale of activity on the cost of labour for Italian manufacturing firms, investigating how the work-force composition affects the total expenditures for wages. Our analysis reveals that once productivity differences among firms are accounted for, size still retains a positive effect on cost of labour. We show that the source of this phenomenon is the relatively higher proportion of non-production workers in bigger firms, which results in a cost of labour for white collar workers that increases with increasing firm size. Copyright The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/cje/bep046
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Bibliographic Info

Article provided by Oxford University Press in its journal Cambridge Journal of Economics.

Volume (Year): 34 (2010)
Issue (Month): 4 ()
Pages: 649-669

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Handle: RePEc:oup:cambje:v:34:y:2010:i:4:p:649-669

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Cited by:
  1. G. Bottazzi & M. Grazzi, 2013. "Dynamics of productivity and cost of labor in Italian Manufacturing firms," Working Papers wp865, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Marco Grazzi, 2009. "Trade and Profitability: Is there an export premium? Evidence from Italian manufacturing firms," LEM Papers Series 2009/16, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  3. Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2012. "Turbulence underneath the big calm? The micro-evidence behind Italian productivity dynamics," Small Business Economics, Springer, vol. 39(4), pages 1043-1067, November.
  4. Marco Grazzi, 2012. "Export and Firm Performance: Evidence on Productivity and Profitability of Italian Companies," Journal of Industry, Competition and Trade, Springer, vol. 12(4), pages 413-444, December.

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