Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996
AbstractIn 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.
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Bibliographic InfoPaper provided by University of Bergamo, Department of Economics in its series Working Papers with number 0502.
Length: 28 pages
Date of creation: 2005
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Wage differential; individual characteristics; international trade; international migration;
Other versions of this item:
- Anna M. Falzoni & Alessandra Venturini & Claudia Villosio, 2004. "Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996," Development Working Papers 190, Centro Studi Luca d\'Agliano, University of Milano.
- Falzoni, Anna M. & Venturini, Alessandra & Villosio, Claudia, 2004. "Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996," IZA Discussion Papers 1204, Institute for the Study of Labor (IZA).
- 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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