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Working on the Train? The Role of Technical Progress and Trade in Explaining Wage Differentials in Italian Firms

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Author Info

  • Paolo Manasse

    (University of Bologna, Italy)

  • Luca Stanca

    (University of Milan-Bicocca, Italy)

Abstract

This paper presents firm- level evidence on the dynamics of the relative demand for non-manual workers in Italian manufacturing during the 1990s. The analysis provides a number of interesting results. First, within-firm skill upgrading is the main determinant of the increase in the non-manual wage bill share. By contrast, demand changes associated to trade have shifted employment away from skill-intensive firms. Second, while the relative number of hours worked by skilled workers within firms has risen, the hourly wage premium has fallen. Third, within-firm skill upgrading is strongly and significantly related to investment in computers and R&D, suggesting skill-biased technical progress as the main explanation for the increase in the relative demand for non-manual workers. Finally, the paper shows that failing to disaggregate annual wages into the number of hours worked and hourly wages, leads to underestimate the skill-bias of technical progress.

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Bibliographic Info

Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 177.

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Date of creation: 01 Dec 2003
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Handle: RePEc:csl:devewp:177

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Related research

Keywords: wage differentials; skill bias; technical progress; globalization;

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Cited by:
  1. Susana Iranzo & Fabiano Schivardi & Elisa Tosetti, 2008. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 247-285, 04.
  2. Francesco Serti & Chiara Tomasi & Antonello Zanfei, 2008. "Exporters, Importers and Two-way traders: The links between internationalization, skills and wage," LEM Papers Series 2008/05, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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