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Skill dispersion and firm productivity: an analysis with employer-employee matched data

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Author Info
Susana Iranzo
Fabiano Schivardi ()
Elisa Tosetti

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Abstract

We study the relation between workers’ skill dispersion and firm productivity using a unique dataset of Italian manufacturing firms from the early eighties to the late nineties with individual records on all their workers. Our measure of skill is the individual worker’s effect obtained as a latent variable from a wage equation. Estimates of a generalized CES production function that depends on the skill composition show that a firm’s productivity is positively related to skill dispersion within occupational status groups (production and non-production workers) and negatively related to skill dispersion between these groups. Consistently, the variance decomposition shows that most of the overall skill dispersion is within and not between firms. We find no change over time in the share of each component, in contrast with some evidence from other countries, based on less comprehensive data.

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Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 200617.

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Date of creation: 2006
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Handle: RePEc:cns:cnscwp:200617

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Related research
Keywords: Matched data Skill distribution Productivity Segregation.

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Matteo Bugamelli & Alfonso Rosolia, 2006. "Productivity and foreign competition," Temi di discussione (Economic working papers) 578, Bank of Italy, Economic Research Department. [Downloadable!]
  2. Stephan Veen & Uschi Backes-Gellner, 2008. "Betriebliche Altersstrukturen und Produktivitätseffekte," Working Papers 0078, University of Zurich, Institute for Strategy and Business Economics (ISU). [Downloadable!]
  3. Hannu Piekkola, 2006. "Tax cuts and employment: Evidence from Finnish linked employer-employee data," Discussion Papers 1041, The Research Institute of the Finnish Economy. [Downloadable!]
  4. Oliviero A. Carboni & Giuseppe Medda, 2007. "Government Size and the Composition of Public Spending in a Neoclassical Growth Model," Working Paper CRENoS 200701, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
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