Discussion Paper

No. 2014-44 | November 06, 2014
The Italian Wage Curve Reloaded. Does Occupation Matter?


This paper provides some evidence on the existence of the wage curve—the negative relationship between individual wages and the local unemployment rate—within a number of occupations. It exploits the Bank of Italy’s Household Survey and draws data from 1977 to 2008. An occupation-level wage curve exists for all the employees, while it holds only for a sub-set of the self-employed. In particular, the wage curve has an elasticity of approximately –0.05 for the blue-collars, an elasticity of –0.1 for the employees and of approximately –0.2 for the executives. This suggests that professional labor markets may have different levels of flexibility, also within the same country. In particular, the professional categories with higher (lower) levels of negative elasticity belong to more (less) flexible labor markets.

JEL Classification:

J31, J64, E24


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Cite As

Gianluca Gucciardi (2014). The Italian Wage Curve Reloaded. Does Occupation Matter? Economics Discussion Papers, No 2014-44, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2014-44

Comments and Questions

Anonymous - Referee report 1
November 17, 2014 - 09:49

see attached file

Anonymous - just a comment
November 26, 2014 - 14:30

After browsing through the paper what really caught my eye was a lack of any discussion of endogeneity or reverse causality issues. If you are running FE regressions (and if I am not mistaken your T=30, so the Nickell bias is not too much of a problem here), why don't ...[more]

... you run some GMM (Dif and Sys) using simple lags as instruments as well? Or even better, why don't you come up with a "real" external instrument? About non-stationarity in panels, why don't you test for it, you can use the standard IPS test, or alternatively make use of Phillips and Moon (1999) result?

Anonymous - Referee report 2
January 02, 2015 - 08:47

see attached file

Anonymous - Referee report 3
January 02, 2015 - 08:48

see attached file