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

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Author Info

  • 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.

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File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper61.pdf
File Function: First version, 2002
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Bibliographic Info

Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 61.

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Length: 46 pages
Date of creation: Nov 2002
Date of revision: Nov 2002
Handle: RePEc:mib:wpaper:61

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References

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  1. Sandra E. Black & Lisa M. Lynch, 2000. "What's Driving the New Economy: The Benefits of Workplace Innovation," NBER Working Papers 7479, National Bureau of Economic Research, Inc.
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  4. Binswanger, Hans P., 1973. "The Measurement Of Technical Change Biases With Many Factors Of Production," Staff Papers 14205, University of Minnesota, Department of Applied Economics.
  5. 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.
  6. 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," International Trade 0103002, EconWPA.
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  9. E Berman & J Bound & Stephen Machin, 1997. "Implications of Skill-Biased Technological Change: International Evidence," CEP Discussion Papers dp0367, Centre for Economic Performance, LSE.
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  11. Haskel, Jonathan E, 2000. "Trade and Labor Approaches to Wage Inequality," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 397-408, August.
  12. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 213-244 National Bureau of Economic Research, Inc.
  13. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, August.
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  15. Robert H. Topel, 1997. "Factor Proportions and Relative Wages: The Supply-Side Determinants of Wage Inequality," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 55-74, Spring.
  16. Haskel, Jonathan E. & Slaughter, Matthew J., 2002. "Does the sector bias of skill-biased technical change explain changing skill premia?," European Economic Review, Elsevier, vol. 46(10), pages 1757-1783, December.
  17. Leamer, Edward E, 1996. "Wage Inequality from International Competition and Technological Change: Theory and Country Experience," American Economic Review, American Economic Association, vol. 86(2), pages 309-14, May.
  18. Haskel, Jonathan, 1996. "Small Firms, Contracting-out, Computers and Wage Inequality: Evidence from UK Manufacturing," CEPR Discussion Papers 1490, C.E.P.R. Discussion Papers.
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  20. Dell'Aringa, Carlo & Lucifora, Claudio, 1994. "Collective bargaining and relative earnings in Italy," European Journal of Political Economy, Elsevier, vol. 10(4), pages 727-747, December.
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  22. George J. Borjas, 1980. "The Relationship between Wages and Weekly Hours of Work: The Role of Division Bias," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 409-423.
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  24. Riccardo Faini & Anna M. Falzoni & Marzio Galeotti & Rodolfo Helg & Alessandro Turrini, 1999. "Importing Jobs and Exporting Firms? On the Wage and Employment Implications of Italian Trade and Foreign Direct Investment Flows," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(1), pages 95-135, April.
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Cited by:
  1. 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).

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