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Wage Structure, Inequality And Skill-Biased Change: Is Italy An Outlier?

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Author Info
Paolo Naticchioni
Andrea Ricci
Emiliano Rustichelli

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Abstract

This paper investigates the relation between wage structure, inequality and skill-biased change in Italy between 1993 and 2004. Using a quantile decomposition analysis, we point out that changes in wage structure are mainly driven by the negative coefficients component, which represents also one of driving force of the trends of wage inequality. This evidence suggests that the changes in wage structure in Italy can hardly be explained referring to a skill-biased change explanation. Evidence that is further reinforced by a set of descriptive statistics showing that the increasing educational attainments of the workforce might have been crowded out by a stable trend in the demand for skills.

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Publisher Info
Paper provided by Università di Perugia, Dipartimento Economia, Finanza e Statistica in its series Quaderni del Dipartimento di Economia, Finanza e Statistica with number 38/2007.

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Length: 23 pages
Date of creation: 15 Oct 2007
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Handle: RePEc:pia:wpaper:38/2007

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Related research
Keywords: Educational wage premia; Human Capital; Skill Biased Change; Quantile regression; Wage Decomposition; Italy;

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Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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  1. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," Harvard Institute of Economic Research Working Papers 2096, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
  2. Andrea Brandolini & Piero Cipollone & Paolo Sestito, 2001. "Earnings Dispersion, Low Pay and Household Poverty in Italy, 1977-1998," Temi di discussione (Economic working papers) 427, Bank of Italy, Economic Research Department. [Downloadable!]
  3. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-44, September. [Downloadable!] (restricted)
    Other versions:
  4. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
    Other versions:
  5. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465. [Downloadable!]
  6. Melly, Blaise, 2005. "Decomposition of differences in distribution using quantile regression," Labour Economics, Elsevier, vol. 12(4), pages 577-590, August. [Downloadable!] (restricted)
  7. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, vol. 62(2), pages 405-58, March. [Downloadable!] (restricted)
  8. Gary Burtless, 1995. "International Trade and the Rise in Earnings Inequality," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 800-816, June. [Downloadable!] (restricted)
  9. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, vol. 50(1), pages 43-61, January. [Downloadable!] (restricted)
  10. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June. [Downloadable!] (restricted)
  11. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March. [Downloadable!] (restricted)
    Other versions:
  12. Erling Barth & Claudio Lucifora, 2006. "Wage Dispersion, Markets and Institutions: The Effects of the Boom in Education on the Wage Structure," IZA Discussion Papers 2181, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Brunello, Giorgio & Miniaci, Raffaele, 1999. "The economic returns to schooling for Italian men. An evaluation based on instrumental variables1," Labour Economics, Elsevier, vol. 6(4), pages 509-519, November. [Downloadable!] (restricted)
  14. Bound, John & Johnson, George, 1992. "Changes in the Structure of Wages in the 1980's: An Evaluation of Alternative Explanations," American Economic Review, American Economic Association, vol. 82(3), pages 371-92, June. [Downloadable!] (restricted)
  15. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-60, September.
    Other versions:
  16. Thomas Lemieux, 2002. "Decomposing changes in wage distributions: a unified approach," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 646-688, November. [Downloadable!] (restricted)
  17. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
  18. Massimiliano Bratti & Nicola Matteucci, 2005. "Is There Skill-Biased Technological Change in Italian Manufacturing? Evidence from Firm-Level Data," Brussels Economic Review/Cahiers Economiques de Bruxelles, Editions du DULBEA, Université libre de Bruxelles, Department of Applied Economics (DULBEA), vol. 48(1-2), pages 153-182.
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