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Working on the Train: Technology, Trade and Wages in Italian Manufacturing

Author

Listed:
  • Paolo Manasse

    (Department of Economics, University of Bologna)

  • Luca Stanca

    (Department of Economics, University of Milan-Bicocca)

Abstract

This paper investigates the increase in demand for non-manual workers in Italian manufacturing during the 1990s. We find that within-firm skill upgrading is the main determinant of this shift in demand, whereas the reallocation of employment across firms reduces the relative demand for skills. Although the adjustment of skill premia is relatively small when referred to annual wages,hourly wage premia and skill intensity reveal substantial and offsetting contributions to wage responses. Within-firm skill upgrading is strongly and significantly related to investment in computers and R&D, suggesting skill biased technical change as the main explanation of the increase in the relative demand for non-manual workers.

Suggested Citation

  • 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.
    • Handle: RePEc:mib:wpaper:61
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