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Technological Change and the Wage Differential between Skilled and Unskilled Workers: Evidence from Italy

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  • Lorenzo Corsini
  • Elisabetta Olivieri

Abstract

We study the evolution of the wage differentials between skilled and unskilled workers in Italy from 1977 to 2004. In this period, the differentials do not show a clear trend (save for a feeble increasing trend in the very last years), but they fluctuate widely around a fairly stable mean. There are four possible factors that influence the evolution of those differentials. The first is the relative supply of skilled workers, as an increase in their supply reduces their relative wage. The second is technological change, which could be skill-biased and could increase the gap. The third is international commerce, which increases the competition from less developed country, possibly reducing the wage of the less skilled. The last is related to the institutions in the labour market, which could affect the distribution of earnings and the way in which wages respond to changes in the relative labour supply. After discussing these theoretical aspects, we perform an econometrical analysis for the Italian case with the SUR estimation technique, and we test which of these factors are important in explaining the evolution of the differentials.

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Paper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2008/73.

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Date of creation: 01 Sep 2008
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Handle: RePEc:pie:dsedps:2008/73

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Citations

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Cited by:
  1. Luciano Fanti & Luca Gori, 2009. "Endogenous lifetime in an overlapping generations small open economy," Discussion Papers 2009/92, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  2. Luciano Fanti & Luca Gori, 2009. "Longevity, fertility and PAYG pension systems sustainability," Discussion Papers 2009/77, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  3. Fanti, Luciano & Gori, Luca, 2010. "Child policy solutions for the unemployment problem," Economics Letters, Elsevier, vol. 109(3), pages 147-149, December.
  4. Manuela Gussoni - Andrea Mangani, 2009. "The impact of public funding for innovation on firms' R&D investments: Do R&D cooperation and appropriability matter?," Discussion Papers 2009/90, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  5. Luca Gori, 2009. "Endogenous fertility, family policy and multiple equilibria," Discussion Papers 2009/79, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  6. Luciano Fanti & Luca Gori, 2009. "On economic growth and minimum wages," Discussion Papers 2009/78, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  7. Luciano Fanti & Luca Gori, 2008. "PAYG pensions and economic cycles: exogenous versus endogenous fertility," Discussion Papers 2008/75, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  8. Luciano Fanti & Luca Gori, 2009. "Endogenous fertility, endogenous lifetime and economic growth: the role of health and child policies," Discussion Papers 2009/91, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  9. Lorenzo Corsini & Pier Mario Pacini & Luca Spataro, 2010. "Workers' Choice on Pension Schemes: an Assessment of the Italian TFR Reform Through Theory and Simulations," Discussion Papers 2010/96, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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