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New Imported Inputs, Wages and Worker Mobility

Author

Listed:
  • Italo Colantone

    (Bocconi University)

  • Alessia Matano

    (AQR-IREA, Department of Econometrics, Statistics and Applied Economics, Universitat de Barcelona)

  • Paolo Naticchioni

    (Roma Tre University, IZA and INPS)

Abstract

We provide a comprehensive assessment of the effects of new imported inputs on wage dynamics, on the skill-composition of the labor force, on worker mobility, and on the efficiency of matching between firms and workers. We employ matched employer-employee data for Italy, over 1995-2007. We complement these data with information on the arrival of new imported inputs at the industry level. We find new imported inputs to have a positive effect on average wage growth at the firm level. This effect is driven by two factors: (1) an increase in the white-collar/blue-collar ratio; and (2) an increase in the average wage growth of blue-collar workers, while the wage growth of white collars is not significantly affected. The individual-level analysis reveals that the increase in the average wage of blue collars is driven by the displacement of the lowest paid workers, while continuously employed individuals are not affected. We estimate the unobserved skills of workers following Abowd et al. (1999). We find evidence that new imported inputs lead to a positive selection of higher-skilled workers, and to an improvement in positive assortative matching between firms and workers.

Suggested Citation

  • Italo Colantone & Alessia Matano & Paolo Naticchioni, 2018. "New Imported Inputs, Wages and Worker Mobility," Working Papers XREAP2018-6, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2018.
    • Handle: RePEc:xrp:wpaper:xreap2018-6
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    Cited by:

    1. Alessia Matano & Paolo Naticchioni & Francesco Vona, 2019. "The Institutional Adjustment Margin to Import Competition: Evidence from Italian Minimum Wages," LEM Papers Series 2019/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Matano, Alessia & Naticchioni, Paolo, 2025. "China's import competition, innovation strategies, and the role of unions," Structural Change and Economic Dynamics, Elsevier, vol. 73(C), pages 423-433.
    3. Matano, Alessia & Naticchioni, Paolo, 2025. "China’s Import Competition, Innovation and the Role of Unions," IZA Discussion Papers 17764, Institute of Labor Economics (IZA).
    4. Ndubuisi, Gideon & Mensah, Emmanuel & Owusu, Solomon, 2020. "Export Variety and Imported Intermediate Inputs: Industry-Level Evidence from Africa," MPRA Paper 106008, University Library of Munich, Germany.

    More about this item

    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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