New Imported Inputs, Wages and Worker Mobility

XREAP 2018-06 Working Paper

57 Pages Posted: 30 Oct 2018

See all articles by Italo Colantone

Italo Colantone

Bocconi University

Alessia Matano

University of Barcelona - Regional Quantitative Analysis Group (AQR-IREA)

Paolo Naticchioni

University of Rome I; University of Cassino

Multiple version iconThere are 2 versions of this paper

Date Written: October 6, 2018

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.

Keywords: new imported inputs, wages, matched employer-employee data

JEL Classification: F14, F16

Suggested Citation

Colantone, Italo and Matano, Alessia and Naticchioni, Paolo, New Imported Inputs, Wages and Worker Mobility (October 6, 2018). XREAP 2018-06 Working Paper. Available at SSRN: https://ssrn.com/abstract=3261742 or http://dx.doi.org/10.2139/ssrn.3261742

Italo Colantone

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Alessia Matano (Contact Author)

University of Barcelona - Regional Quantitative Analysis Group (AQR-IREA) ( email )

Tower IV
Av. Diagonal 690
Barcelona, 08034
Spain

Paolo Naticchioni

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

University of Cassino ( email )

Cassino
Italy

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