Alessia Matano

What Drives the Urban Wage Premium? Evidence Along the Wage Distribution

This paper aims at disentangling the role played by different explanations on the urban wage premium along the wage distribution. We analyze the wage dynamics of migrants from lower to higher density areas in Italy, using quantile regressions and individual data. The results show that unskilled workers benefit more from a wage premium accruing over time, while skilled workers enjoy a wage premium when they migrate as well as a wage increase over time. Further, we find that for unskilled workers the wage growth over time is mainly due to human capital accumulation in line with the “learning” hypothesis, while for skilled workers the wage growth is mainly explained by the “coordination” hypothesis, i.e., cities enhance the probability of better matches between workers and firms.

Trade and Wage Inequality: Local Versus Global Comparative Advantages

This paper shows that disentangling the local and global dimensions of trade can be crucial to get a better understanding of the trade impact on wage inequality. In particular, it allows us to reconcile the empirical evidence with the Heckscher-Ohlin-Samuelson predictions. Our focus here is on Italy, which represents, in our opinion, an appropriate case study. As for local trade -within its own cone of diversification - Italy is specialized in the production of unskill-intensive goods, while for global trade -with respect to the other cone of diversification- it is mainly specialized in the production of skill-intensive goods. On the evidence of these specialization patterns, we point out that the local trade entails a strong impact on wage inequality. In particular, in line with the Heckscher-Ohlin-Samuelson predictions, the local export performance reduces wage inequality since it favours blue-collar workers. As for global trade, it affects and increases wage inequality through the export channel, again consistently with the Heckscher-Ohlin-Samuelson predictions.

Educational mismatches in the EU: immigrants vs natives

Purpose - – The purpose of this paper is to analyse and explain the factors contributing to the observed differences in skill mismatches (vertical and horizontal) between natives and immigrants in EU countries. Design/methodology/approach - – Using microdata from the 2007 wave of the Adult Education Survey (AES), different probit models are specified and estimated to analyse differences in the probability of each type of skill mismatch between natives and immigrants. Yun’s decomposition method is used to identify the relative contribution of characteristics and returns to explain the differences between the two groups. Findings - – Immigrants are more likely to be skill mismatched than natives. The difference is much larger for vertical mismatch, wherein the difference is higher for immigrants coming from non-EU countries than for those coming from other EU countries. The authors find that immigrants from non-EU countries are less valued in EU labour markets than natives with similar characteristics – a result that is not observed for immigrants from EU countries. These results could be related to the limited transferability of human capital acquired in non-EU countries. Social implications - – The findings suggest that specific programmes to adapt immigrants’ human capital acquired in the home country are required to reduce differences in the incidence of skill mismatch and better integration into EU labour markets. Originality/value - – This research is original, because it distinguishes between horizontal and vertical mismatch – an issue that has not been considered in the literature on differences between native and immigrant workers and due to the wide geographical scope of the analysis, which considers EU and non-EU countries.

Wage Distribution and the Spatial Sorting of Workers and Firms

Spatial sorting plays an important role in accounting for disparities in average wages among locations. This paper shows that sorting also matters when addressing the relation between spatial externalities and wage distribution, i.e. across workers located at di erent percentiles of the wage distribution. Using Italian employer-employee panel data we can control for individual and firm heterogeneity as well as for unobserved individual heterogeneity by means of quantile fixed e ects estimates. After controlling for the sorting of workers the spatial externality impacts dampen along the whole wage distribution and generally remain positive only in the upper tail. As for firm sorting, it becomes uniform along the wage distribution once individual fixed effects are considered. We also point out that the impact of worker sorting is not homogeneous across sectors: along the density dimension it occurs mainly in skill-intensive sectors, while along the specialization dimension it is concentrated in the unskill-intensive sectors.

EU Immigrant Integration Policies and Returns on Human Capital

In order to address skill shortages and the demographic challenges facing the EU, member states have to attract (and retain) the more skilled migrants. Nevertheless, foreign residents generally find a significant wage gap with respect to native-born workers when arriving in a host country. Favourable integration policies seem to improve the relative performance of immigrants in the labour market. Indeed, analysis of the role of favourable or unfavourable policies in supporting labour market mobility of recently arrived immigrants shows that wage discrimination between immigrants and natives is lower in those countries with more favourable policies and that this lower gap is associated with higher returns on experience and schooling.