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Wage Inequality, Employment Structure and Skill-biased Change in Italy

  • Paolo Naticchioni
  • Andrea Ricci
  • Emiliano Rustichelli

This paper investigates empirically the relation between wage inequality, employment structure, and skill-biased change in Italy between 1993 and 2004. Applying quantile decomposition analysis, we point out that changes in wage inequality are mainly driven by a decrease in educational premia over time, whereas changes in employment structure play a negligible role. This evidence suggests that changes in wage inequality in Italy can hardly be interpreted in terms of a skill-biased change, and the evidence 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. Copyright 2008 The Authors. Journal compilation CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd. 2008.

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Article provided by CEIS in its journal LABOUR.

Volume (Year): 22 (2008)
Issue (Month): s1 (06)
Pages: 27-51

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Handle: RePEc:bla:labour:v:22:y:2008:i:s1:p:27-51
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  1. Paolo Naticchioni & Andrea Ricci & Emiliano Rustichelli, 2010. "Far away from a skill-biased change: falling educational wage premia in Italy," Applied Economics, Taylor & Francis Journals, vol. 42(26), pages 3383-3400.
  2. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2005. "Rising Wage Inequality: The Role of Composition and Prices," NBER Working Papers 11628, National Bureau of Economic Research, Inc.
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  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.
  9. 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 and International Relations Area.
  10. 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.
  11. Lilla Marco, 2005. "Disuguaglianze salariali in Italia: nuove evidenze dai microdati SHIW," Politica economica - Journal of Economic Policy (PEJEP), Società editrice il Mulino, issue 1, pages 71-102.
  12. Alessia Matano & Paolo Naticchioni, 2010. "Trade and Wage Inequality: Local versus Global Comparative Advantages," The World Economy, Wiley Blackwell, vol. 33(12), pages 1757-1787, December.
  13. Melly, Blaise, 2005. "Decomposition of differences in distribution using quantile regression," Labour Economics, Elsevier, vol. 12(4), pages 577-590, August.
  14. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
  15. repec:adr:anecst:y:1996:i:41-42:p:16 is not listed on IDEAS
  16. Barth, Erling & Lucifora, Claudio, 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).
  17. 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.
  18. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  19. Maarten Goos & Alan Manning, 2003. "Lousy and Lovely Jobs: the Rising Polarization of Work in Britain," CEP Discussion Papers dp0604, Centre for Economic Performance, LSE.
  20. Peracchi, Franco, 2006. "Educational Wage Premia and the Distribution of Earnings: An International Perspective," Handbook of the Economics of Education, Elsevier.
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