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Do Satisfactory Working Conditions Contribute to Explaining Earning Differentials in Italy? A Panel Data Approach


  • Ambra Poggi


The aim of the present paper is to analyse the wage differentials associated with non-pecuniary working conditions using objective and subjective data. In some situations a worker can be compensated for unsatisfactory working conditions via a higher wage; conversely, in the presence of segmented labor markets, higher wages can be associated with favorable non-monetary working conditions. Moreover, a positive correlation between wages and satisfactory working conditions exists when there is efficient union bargaining regarding both wages and working conditions. In the present study, we estimate a wage equation with variables that capture workers' subjective views regarding their current non-pecuniary working conditions, allowing for unobserved individual heterogeneity. Our results reveal a positive wage differential associated with satisfactory non-pecuniary working conditions. This result supports the segmentation labor market hypothesis. The focus of the study is on Italian workers, but we compare the core results the those obtained for other Mediterranean countries. Copyright 2007 The Author. Journal compilation CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd. 2007.

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  • Ambra Poggi, 2007. "Do Satisfactory Working Conditions Contribute to Explaining Earning Differentials in Italy? A Panel Data Approach," LABOUR, CEIS, vol. 21(4-5), pages 713-733, December.
  • Handle: RePEc:bla:labour:v:21:y:2007:i:4-5:p:713-733

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    References listed on IDEAS

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    Cited by:

    1. Bocquier, Philippe & Nordman, Christophe J. & Vescovo, Aude, 2010. "Employment Vulnerability and Earnings in Urban West Africa," World Development, Elsevier, vol. 38(9), pages 1297-1314, September.
    2. S. Cicognani & M. Cioni & M. Savioli, 2016. "The secret to job satisfaction is low expectations: How perceived working conditions differ from actual ones," Working Papers wp1083, Dipartimento Scienze Economiche, Universita' di Bologna.
    3. repec:dau:papers:123456789/4294 is not listed on IDEAS
    4. Fernández, Rosa M. & Nordman, Christophe J., 2009. "Are there pecuniary compensations for working conditions?," Labour Economics, Elsevier, vol. 16(2), pages 194-207, April.
    5. Njang Vera Anweh & Ndamsa Dickson Thomas, 2017. "Employment Vulnerability in Cameroon's Private Sector," Research Papers RP_333, African Economic Research Consortium.
    6. Ndamsa Dickson Thomas & Baye Mendjo Francis & Epo Boniface Ngah, 2013. "Responsiveness of Private Sector Household Income to Employment Vulnerability in Cameroon," EuroEconomica, Danubius University of Galati, issue 1(32), pages 153-177, May.
    7. Simona Cicognani & Martina Cioni & Marco Savioli, 2017. "Conditions at work: how actual and expected working conditions drive perception," Working Paper series 17-17, Rimini Centre for Economic Analysis.

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