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Wage Premia and Skill Upgrading in Italy: Why didn’t the Hound Bark?

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  • Paolo Manasse
  • Luca Stanca
  • Alessandro Turrini

Abstract

This paper presents firm level evidence on the change of non-manual wage premia and employment shares in Italian manufacturing during the nineties. We find that the relative stability of aggregate wage premia and employment shares hides offsetting disaggregate forces. First, while technical progress raises the relative demand for skilled labor within firms, demand changes associated with exports reduce the relative demand for skills. Second, within the class of non-manual workers, wage premia and employment shares of executives rise substantially, whereas those of clerks fall in a similar proportion. We also find that the export status of firms plays a key role in explaining labor market dynamics, as exporters account for most of both demand-related and technology-related shifts. Overall, our results for Italy question the general validity of the conventional view that emphasizes the role of labor market institutions, as opposed to trade and technology, in determining wage and employment dynamics in continental Europe.

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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 204.

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Handle: RePEc:igi:igierp:204

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Cited by:
  1. Antonio Accetturo & Matteo Bugamelli & Andrea Lamorgese, 2013. "Skill upgrading and exports," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 919, Bank of Italy, Economic Research and International Relations Area.
  2. Andrea Caggese & Vicente Cunat, 2013. "Financing Constraints, Firm Dynamics, Export Decisions, and Aggregate Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 177-193, January.
  3. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2003. "The Skill Bias Effect of Technological and Organisational Change: Evidence and Policy Implications," IZA Discussion Papers 934, Institute for the Study of Labor (IZA).
  4. 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).
  5. Anna M. Falzoni & Alessandra Venturini & Claudia Villosio, 2007. "Skilled and Unskilled Wage Dynamics in Italy in the ‘90s: Changes in the individual characteristics, institutions, trade and technology," LABORatorio R. Revelli Working Papers Series 61, LABORatorio R. Revelli, Centre for Employment Studies.
  6. Paolo Ghinetti, 2007. "Technology Innovations, Organisational Changes and Firms’ Wages in Italy," Working Papers, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont 111, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont.
  7. Paolo Manasse & Luca Stanca, 2002. "Working on the Train: Technology, Trade and Wages in Italian Manufacturing," Working Papers, University of Milano-Bicocca, Department of Economics 61, University of Milano-Bicocca, Department of Economics, revised Nov 2002.
  8. Dumont, Michel, 2006. "The reliability-or lack thereof-of data on skills," Economics Letters, Elsevier, vol. 93(3), pages 348-353, December.
  9. Anna M. Falzoni & Lucia Tajoli, 2008. "Offshoring and the skill composition of employment in the Italian manufacturing industries," KITeS Working Papers, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy 219, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2008.
  10. Aleksandra Parteka, 2012. "Skilled-Unskilled Wage Gap Versus Evolving Trade And Labour Market Structures in the EU," Working Papers, Instytut Rozwoju, Institute for Development 1204, Instytut Rozwoju, Institute for Development.
  11. Mara GRASSENI, 2004. "Technology, MNEs activity and Italian skill upgrading," Departmental Working Papers, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano 2004-25, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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