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

  • Paolo Manasse

    ()

    (Department of Economics, University of Bologna)

  • Luca Stanca

    ()

    (Department of Economics, University of Milan-Bicocca)

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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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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  2. Manasse, Paolo & Stanca, Luca & Turrini, Alessandro, 2004. "Wage premia and skill upgrading in Italy: why didn't the hound bark?," Labour Economics, Elsevier, vol. 11(1), pages 59-83, February.
  3. Christopher Erickson & Andrea Ichino, 1995. "Wage Differentials in Italy: Market Forces, Institutions, and Inflation," NBER Chapters, in: Differences and Changes in Wage Structures, pages 265-306 National Bureau of Economic Research, Inc.
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  8. Machin, S. & Van Reenen, J., 1997. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," Papers 24, Centre for Economic Performance & Institute of Economics.
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  12. Bernard, Andrew B. & Jensen, J. Bradford, 1997. "Exporters, skill upgrading, and the wage gap," Journal of International Economics, Elsevier, vol. 42(1-2), pages 3-31, February.
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  14. Wood Júnior, Thomaz, 1995. "Workers," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 35(2), January.
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  16. 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.
  17. Haskel, Jonathan, 1999. "Small Firms, Contracting-Out, Computers and Wage Inequality: Evidence from UK Manufacturing," Economica, London School of Economics and Political Science, vol. 66(261), pages 1-21, February.
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  19. 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.
  20. 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.
  21. 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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  26. Nicole M. Fortin & Thomas Lemieux, 1997. "Institutional Changes and Rising Wage Inequality: Is There a Linkage?," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 75-96, Spring.
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