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

Paolo Manasse () and Luca Stanca ()

No 61, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: 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.

Date: 2002-11, Revised 2002-11
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