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Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996

Author

Listed:
  • Anna M.Falzoni

    (Department of Economics, University of Bergamo)

  • Alessandra Venturini

    (Department of Economics, University of Turin)

  • Claudia Villosio

    (R&P Ricerche e Progetti)

Abstract

In this paper we use individual micro data on workers combined with industry and regional data to study the dynamics of the wage differentials between skilled and unskilled workers in Italy in the period 1991-1996. Being different to previous empirical studies, our data allow us to explore in a unique framework the role of many of the factors indicated in the literature as possible causes of the widening of the wage gap between skilled and unskilled workers: changes in the individual characteristics of workers, changes in the institutions of the labour market, increasing international integration and skill-biased technological progress. Our results show that international integration, both in terms of trade in goods and in terms of international labour mobility, plays a role in determining the wage differential between skilled (white collar) and unskilled (blue collar) workers, but the impact is in opposite directions. While, on the one hand, increasing trade in goods reduces wage differentials (through a positive impact on the wages of the unskilled workers), on the other hand immigration increases wage differentials, affecting the wage of the unskilled. In addition, in line with the research in labour economics, our findings show that the individual characteristics of workers matter in explaining wage differentials: the growth of women participation in the labour market reduces the wage gap, while the ageing of the employees increases it.

Suggested Citation

  • Anna M.Falzoni & Alessandra Venturini & Claudia Villosio, 2005. "Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996," Working Papers (-2012) 0502, University of Bergamo, Department of Economics.
    • Handle: RePEc:brg:wpaper:0502
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    References listed on IDEAS

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    3. Harry P. Bowen & Jennifer Pédussel Wu, 2013. "Immigrant Specificity and the Relationship between Trade and Immigration: Theory and Evidence," Southern Economic Journal, John Wiley & Sons, vol. 80(2), pages 366-384, October.

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    More about this item

    Keywords

    Wage differential; individual characteristics; international trade; international migration;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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