Lorenzo Corsini

Institutions, technological change and the wage differentials between skilled and unskilled workers: theory and evidence from Europe

This article studies the evolution of the wage differentials between graduate (skilled) and non-graduate (unskilled) workers in several European countries from the beginning of the 1990s to the beginning of this century. The starting point is that all European countries show a common increase in the relative supply of skilled workers but different evolution of wage differentials. Economics theory usually relates the evolution of wage differentials not only to relative supply but also to skill-biased technological progress. I complement this explanation providing a theoretical model of wage bargaining where wage differentials are determined also by labour market institutions. My empirical findings show that both technological progress and labour market institutions are important in the determination of wage differentials. As for the former, I find that differentials depend on the pace and intensity at which technological progress takes place. As for labour market institutions, their effect, though important, is not always straightforward. In fact, some aspects of institutions, like minimum wage and the duration of unemployment benefits, favour unskilled workers while other aspects, like bargaining power and replacement rates from unemployment benefits, may magnify the differences in outside options and actually increase wage differentials.

The Transition from Temporary to Permanent Employment: Evidence from Tuscany

In this paper, by distinguishing between the decisions made by the workers and those made by the firms, we provide a probabilistic evaluation of the transition from temporary to permanent employment in a regional context. Specifically, by exploiting a multinomial nested logit strategy of estimation, we find that the transition to a permanent job is far from certain, especially for women and older workers.

Endogenous Financial Literacy, Saving, and Stock Market Participation

There is a consolidated empirical literature providing evidence of the fact that financial literacy, human capital, savings and stock market participation are interconnected decisions. However, to the best of our knowledge, a theoretical explanation of such connections is missing. In this paper we aim at filling this gap, by building a framework that includes all these decisions in an encompassing model. The results of our model provide a theoretical foundation for the role and the determinants of financial literacy and are able to explain several stylized facts on literacy and stock market participation.

How unemployment benefits affect individuals of different wealth classes: Some evidence from Italy

Purpose - This paper investigates whether the effect of unemployment benefits (UB) on unemployment duration is the same for individuals belonging to different wealth groups. Design/methodology/approach - Using a sample of newly unemployed individuals from Italy in 2007, we perform estimations of semi-parametric and parametric Cox hazard models and finds a significant interaction between benefits and wealth. Findings - In particular, we show that the mitigating effect of benefits on liquidity constraints is less marked for individuals from richer households and therefore, for these individuals, benefits do not increase unemployment duration. Originality/value - The results also show that liquidity constraints are important in determining unemployment duration and that wealth has an important role in the actual effect of UB.

Is there really no link between international trade and wage differentials

This article investigates empirically the relationship between international trade (in particular with non-OECD countries) and wage differentials of workers with different skills. We examine years from 1996 to 2005 in several countries and, whereas past studies (using data from previous years) had not detected any relevant relationship, we find a clean-cut positive effect of imports from non-OECD countries on differentials. In addition, we find evidence that technological change is having a polarization effect on wages.