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 differential 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 all 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, in skill-biased technological progress and increasing international integration. Our results show that individual, firm and macro variables matter in explaining wage differentials. In particular, 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 and unskilled 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. As for the role of trade in goods, it is interesting to note that export growth has a positive impact on the wages of the blue collar workers and has no effect on the wages of the white collars, supporting the idea that Italy is atypical with respect to other industrialised countries and has a comparative advantage in low-skilled labour-intensive production. We have also shown that an analysis of the wage differentials hides their different effects on the white and blue collar wage dynamics of the explicative variables.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1204.
Length: 23 pages
Date of creation: Jul 2004
Date of revision:
Publication status: published as 'Skilled and unskilled wage dynamics in Italy in the 1990s: changes in individual characteristics, institutions, trade and technology' in: International Review of Applied Economics, 2011, 25 (4), 441 – 463,
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Other versions of this item:
- Anna M.Falzoni & Alessandra Venturini & Claudia Villosio, 2005. "Wage Differentials and International Trade in Italy Using Individual Micro Data 1991-1996," Working Papers 0502, University of Bergamo, Department of Economics.
- 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.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
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.:
- Riccardo Faini & Anna M. Falzoni & Marzio Galeotti & Rodolfo Helg & Alessandro Turrini, 2001.
"Importing Jobs And Exporting Firms? On The Wage And Employment Implications Of Italy’S Trade And Foreign Direct Investment Flows,"
- Rodolfo Helg & Riccardo Faini & Anna M. Falzoni & Marzio Galeotti & Alessandro Turrini, 2001. "Importing Jobs And Exporting Firms? On The Wage And Employment Implications Of Italy’S Trade And Foreign Direct Investment Flows," International Trade 0103001, EconWPA.
- Manasse, Paolo & Stanca, Luca & Turrini, Alessandro, 2004.
"Wage premia and skill upgrading in Italy: why didn't the hound bark?,"
Elsevier, vol. 11(1), pages 59-83, February.
- P. Manasse & L. Stanca & A. Turrini, 2001. "Wage Premia and Skill Upgrading in Italy: Why didn't the Hound Bark?," Working Papers 423, Dipartimento Scienze Economiche, Universita' di Bologna.
- Paolo Manasse & Luca Stanca & Alessandro Turrini, 2002. "Wage Premia and Skill Upgrading in Italy: Why Didn´t the Hound Bark?," Development Working Papers 162, Centro Studi Luca d\'Agliano, University of Milano.
- Manasse, Paolo & Stanca, Luca & Turrini, Alessandro Antonio, 2002. "Wage Premia and Skill Upgrading in Italy: Why Didn't the Hound Bark?," CEPR Discussion Papers 3202, C.E.P.R. Discussion Papers.
- Paolo Manasse & Luca Stanca & Alessandro Turrini, . "Wage Premia and Skill Upgrading in Italy: Why didn’t the Hound Bark?," Working Papers 204, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Paolo Manasse & Luca Stanca & Alessandro Turrini, 2001. "Wage Premia and Skill Upgrading in Italy: Why didn’t the Hound Bark?," Working Papers 37, University of Milano-Bicocca, Department of Economics, revised Nov 2001.
- Corneo, Giacomo & Lucifora, Claudio, 1997.
"Wage formation under union threat effects: Theory and empirical evidence,"
Elsevier, vol. 4(3), pages 265-292, September.
- Corneo Giacomo & Lucifora Claudio, 1993. "Wage formation under union threat effects : theory and empirical evidence," CEPREMAP Working Papers (Couverture Orange) 9318, CEPREMAP.
- Cappellari, Lorenzo, 2000.
"The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?,"
ISER Working Paper Series
2000-41, Institute for Social and Economic Research.
- Lorenzo Cappellari, 2002. "The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 C2-2, International Conferences on Panel Data.
- Stephen Machin & John Van Reenen, 1998.
"Technology and changes in skill structure: evidence from seven OECD countries,"
IFS Working Papers
W98/04, Institute for Fiscal Studies.
- Stephen Machin & John Van Reenen, 1998. "Technology And Changes In Skill Structure: Evidence From Seven Oecd Countries," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1215-1244, November.
- Machin, S. & Van Reenen, J., 1997. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," Papers 24, Centre for Economic Performance & Institute of Economics.
- Neuman, Shoshana & Oaxaca, Ronald L, 1998. "Estimating Labour Market Discrimination with Selectivity Corrected Wage Equations: Methodological Considerations and an Illustration from Israel," CEPR Discussion Papers 1915, C.E.P.R. Discussion Papers.
- Maria Luigia Segnana, 1998.
"Trade and labour markets: vertical and regional differentiationin Italy,"
Department of Economics Working Papers
9810, Department of Economics, University of Trento, Italia.
- Giuseppe Celi & Maria Luigia Segnana, 2000. "Trade and Labour Markets: Vertical and Regional Differentiation in Italy," LABOUR, CEIS, vol. 14(3), pages 441-472, 09.
- Paolo Manasse & Luca Stanca, 2002. "Working on the Train: Technology, Trade and Wages in Italian Manufacturing," Working Papers 61, University of Milano-Bicocca, Department of Economics, revised Nov 2002.
- Rodolfo Helg & Lucia Tajoli, 2004.
"Patterns of International Fragmentation of Production and Implications for the Labor Markets,"
- Rodolfo Helg & Lucia Tajoli, 2002. "Patterns of International Fragmentation of Production and Implications for the Labor Markets," Working Papers 503, Research Seminar in International Economics, University of Michigan.
- Cipollone Piero, 2001. "La convergenza dei salari dell'industria manifatturiera in Europa," Politica economica, Società editrice il Mulino, issue 1, pages 97.
- Bruno Contini & Michelangelo Filippi & Claudio Malpede, 2000. "Safari nella giungla dei salari. Nel Mezzogiorno si lavora di meno?," LABORatorio R. Revelli Working Papers Series 3, LABORatorio R. Revelli, Centre for Employment Studies.
- Mitko Dimitrov & Wladimir Andreff & Laszlo Csaba (ed.), 1999. "Economies in Transition and the Variety of Capitalisms. Features, Changes, Convergence," ERI-BAS Books, Bulgarian Academy of Sciences - Economic Research Institute, number 1:p:1-527, September.
- Haskel, Jonathan, 2000.
"The Trade and Labour Approaches to Wage Inequality,"
CEPR Discussion Papers
2476, C.E.P.R. Discussion Papers.
- Jonathan E. Haskel, 1999. "The Trade and Labour Approaches to Wage Inequality," Working Papers 405, Queen Mary, University of London, School of Economics and Finance.
- Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
- Christopher L. Erikson & Andrea Ichino, 1994.
"Wage Differentials in Italy: Market Forces, Institutions, and Inflation,"
NBER Working Papers
4922, National Bureau of Economic Research, Inc.
- Christopher Erickson & Andrea Ichino, 1995. "Wage Differentials in Italy: Market Forces, Institutions, and Inflation," NBER Chapters, in: Differences and Changes in Wage Structures, pages 265-306 National Bureau of Economic Research, Inc.
- Machin, Stephen, 1996. "Wage Inequality in the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 12(1), pages 47-64, Spring.
- Cappellari, Lorenzo, 2004.
"Earnings Mobility Among Italian Low Paid Workers,"
IZA Discussion Papers
1068, Institute for the Study of Labor (IZA).
- Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
- Claudio Lucifora, 1999. "Wage Inequalities and Low Pay: The Role of Labour Market Institutions," Working Papers 1999.13, Fondazione Eni Enrico Mattei.
- Eli Berman & John Bound & Zvi Griliches, 1993. "Changes in the Demand for Skilled Labor within U.S. Manufacturing Industries: Evidence from the Annual Survey of Manufacturing," NBER Working Papers 4255, National Bureau of Economic Research, Inc.
- Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1.
- Agar Brugiavini, 1998. "An Empirical Analysis of Interfirm Mobility in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 57(1), pages 1-34, April.
- Lucio Baccaro, 2000. "Centralized collective bargaining and the problem of "compliance": Lessons from the Italian experience," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(4), pages 579-601, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.