Emigration and Immigration in Italy: Recent Trends

ABSTRACT: During the eighties Italy has evolved into being a receiver of immigration. However, the existence of large Italian communities abroad, and the persistence of exit migratory flows (although amply compensated by re-entry flows) show that the connotation of Italy as a country of emigration still persists. This paper points out the differing composition of present immigration flows to Italy compared to those of Italian migratory flows towards the more industrially advanced European countries over the past decades. The labour forces that constitute these present day immigration flows often possess medium to high educational qualifications, and are more frequently absorbed into the tertiary and agricultural markets, rather than the industrial sector. These immigrants rarely have regular, unionized occupations, and satisfy a demand for precarious, unstable labour which is in expansion in Italy, as in other countries. Furthermore, these immigration flows are directed not only towards those regions with high employment rates, but also to those with high unemployment rates. Thus, the implications are that the character of present day emigration can only be clearly understood by taking into account the highly segmented aspect of the labour market.     

The Effect of Trade on Employment and Wages in Italian Industry

The paper analyses the labour market impact of international trade on the Italian manufacturing sector. Using data for a panel of manufacturing industries the effects of trade‐induced changes in sales on employment and wages are investigated. The evidence suggests that the industry adjustment to demand shocks took place mainly through employment changes. However, increased exposure to foreign competition had a small effect on the Italian labour market, while technological change seems to have a major role in explaining the increase in unemployment.     

European Integration and the Integration of European Labour Markets1

Abstract. Will European economic and monetary union bring about a unification of European labour markets, and is there likely to be a convergence of patterns of labour market organisation among Community countries? The evidence discussed suggests that a major increase in unskilled mobility across the EC is unlikely, at least concerning EC citizens. Among skilled labour, a major increase in international mobility is also unlikely on account of differences in skill organisation among countries. In contrast, the integration of European capital is causing some integration of enterprise internal labour markets across national borders as firms seek to integrate their managerial and technical workforces. In the “high-tech” area, skills are in a state of flux, and the possibility that European labour markets will emerge is much stronger than for other categories.     

Sources of Job and Worker Flows: Evidence from a Panel of Regions

Abstract. This study explores the structure and the dynamics of regional job and worker flows. The measures of job and worker flows are related to economic fluctuations, demographic factors and industry structure by employing the data of 85 Finnish regions over the period 1988–97. It is shown that labour market dynamics differ markedly between regions. As in previous analyses of linked employer–employee data, job and worker flows are shown to behave cyclically. In addition, the results indicate that observable differences in regional productivity, in‐migration, demographics and industry structure help to explain the prevailing disparities in regional labour markets.     

Comparisons in Gender Wage Differentials and Discrimination between Germany and the United Kingdom

Due to the lack of consistent data, direct and robust comparisons of cross‐country labour markets have been virtually impossible. This study uses a new panel data series that controls for inconsistencies, thus overcoming this problem. This study estimates gender wage differentials and gender discrimination in the German and UK labour markets. Panel estimates are used to identify general wage differences between the two countries, with cross‐sectional comparisons undertaken to identify changes that have occurred between 1991 and 1993, that are consistent with known labour market policies. It is found that gender wage differentials are greater in the UK than Germany with employer discrimination against females attributed with the majority of the difference in both countries.     

Matching Efficiency and Labour Market Reform in Italy: A Macroeconometric Assessment

Abstract. A matching theory approach is used to assess the impact on the Italian labour market of the 1997 Treu Act (legge Treu), which considerably eased the regulation of temporary work and favoured its growth in Italy. We re‐parameterize the matching function as a Beveridge Curve and estimate it as a production frontier, finding huge differences in matching efficiency between the South and the rest of the country. The Treu Act appears to have improved matching efficiency in the North of the country, particularly for skilled workers, but also to have strengthened competition among skilled and unskilled workers, especially in the South.     

INSTITUTION‐INDUCED PRODUCTIVITY DIFFERENCES AND PATTERNS OF INTERNATIONAL CAPITAL FLOWS

This paper studies theoretically how the cross‐country differences in the institutional quality (IQ) of domestic credit markets shape the patterns of international capital flows when such IQ differences also cause productivity differences across countries. IQ affects productivity by changing productivity–agency‐cost trade‐offs across heterogeneous investment projects. Such institution‐induced productivity differences are shown to have effects on the investment and capital flows that are opposite of exogenous productivity differences. This implies that the overall effect of IQ could generate U‐shaped responses of the investment and capital flows. Among other things, this means that capital could flow from middle‐income countries to both low‐income and high‐income countries, and that, starting from a very low IQ, a country could experience both a growth and a current account surplus after a successful institutional reform. More generally, the results here provide some cautions when interpreting the empirical evidence on the role of productivity differences and institutional differences on capital flows. It also calls into question the validity of treating the degree of financial frictions as a proxy for the quality of financial institutions, as commonly done in the literature.     

The Cyclical Volatility of Equilibrium Unemployment and Vacancies: Evidence From Italy

In this study, we explore the fluctuations of unemployment and vacancies in the Italian labour market over the last 20 years. Relying on the available sources of data for unfilled job openings, we find that even in Italy, similarly to other developed countries, there is a clean evidence of the unemployment volatility puzzle. In other words, we empirically assess that the tightness indicator is significantly more volatile than productivity over the whole period. In addition, on the theoretical ground, we show that a matching model with segmented labour markets and on‐the‐job search has the potential to provide a rationale for this pattern.     

Temporary/Permanent Workers' Wage Gap: A Brand‐new Form of Wage Inequality?

By easing restrictions on the use of short‐term contracts, the 30/2003 act represents contemporaneously the more extensive and the more radical policy aimed at introducing flexibility in the Italian labour market. By virtue of a difference‐in‐differences estimator, the paper provides an estimate of the impact of the 30/2003 reform on the wage gap across fixed‐term and long‐term employees. It will be given evidence that the policy has widened the wage differentials and the effect is particularly stronger to skilled workers compared with unskilled workers. These findings would suggest the existence of a possible brand‐new form of wage inequality.     

Subjective Measures of Employment Opportunities and Interregional Migration

Abstract. Empirical studies of interregional mobility routinely use regional unemployment differentials to characterize economic incentives to move between regions. In this paper, we present a new regional labour market indicator computed from survey data in which respondents are asked to evaluate local employment opportunities in their resident municipality and surroundings. The subjective measures of satisfaction with local employment opportunities have positive and significant impact on interregional migration flows, also when controlling for traditional measures of regional labour market conditions, including the regional unemployment rate. Contrary to most European studies, we find that regional labour market conditions have a strong effect on interregional migration flows.     

进入壁垒与企业产品差异化策略

本文在两个被贸易壁垒分离的市场上分析了贸易壁垒对产品横向差异化的影响。所获得的主要结论为,当在市场A与市场B中都存在竞争时,每个企业所生产的商品在国内销售的价格要高于其出口的价格。当贸易壁垒足够高时,国内企业垄断市场是可能的。当有双向贸易时,即两个企业在市场上充分竞争时,高的贸易壁垒会使企业将产品靠近其竞争者,从而导致产品差异化程度降低,模仿更容易发生。     

THE RISE OF THE EAST AND THE FAR EAST: GERMAN LABOR MARKETS AND TRADE INTEGRATION

We analyze the effects of the unprecedented rise in trade between Germany and “the East” (China and Eastern Europe) in the period 1988–2008 on German local labor markets. Using detailed administrative data, we exploit the cross‐regional variation in initial industry structures and use trade flows of other high‐income countries as instruments for regional import and export exposure. We find that the rise of the East in the world economy caused substantial job losses in German regions specialized in import‐competing industries, both in manufacturing and beyond. Regions specialized in export‐oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 442,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. This is almost exclusively driven by the rise of Eastern Europe, not by China. We also conduct an analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships.     

A GLOBAL VIEW OF CROSS‐BORDER MIGRATION

This paper evaluates the global welfare impact of observed levels of migration using a quantitative multi‐sector model of the world economy calibrated to aggregate and firm‐level data. Our framework features cross‐country labor productivity differences, international trade, remittances, and a heterogeneous workforce. We compare welfare under the observed levels of migration to a no‐migration counterfactual. In the long run, natives in countries that received a lot of migration—such as Canada or Australia—are better off due to greater product variety available in consumption and as intermediate inputs. In the short run, the impact of migration on average welfare in these countries is close to zero, while the skilled and unskilled natives tend to experience welfare changes of opposite signs. The remaining natives in countries with large emigration flows—such as Jamaica or El Salvador—are also better off due to migration, but for a different reason: remittances. The welfare impact of observed levels of migration is substantial, at about 5% to 10% for the main receiving countries and about 10% in countries with large incoming remittances.     

Turnover and Excess Worker Reallocation. The Veneto Labour Market between 1982 and 1996

This research exploits a large matched employer–employee data set for an Italian region, the Veneto, that is presented here for the first time, in order to analyse job and worker flows. In a first part, the paper computes worker turnover, job turnover, and excess worker reallocation over a time span of 14 years. The results are discussed, and comparisons are made between the quantitative features of the labour market in the Veneto region and those of other labour markets. In a second part, turnover and excess worker reallocation are related to search costs, and new empirical evidence is presented that helps in understanding the connections between search activity, unemployment, and the economic cycle.     

The Determinants of Child Labour: The Role of Primary Product Specialization

Abstract. The paper tests predictions of a traditional intra‐household bargaining model which, under reasonable assumptions, shows that lack of bargaining power in the value chain significantly reduces the capacity for obtaining benefits from increased product demand arising from trade liberalization and therefore is positively associated with child labour. Cross‐sectional and panel negative binomial estimates in a sample of emerging countries support this hypothesis. They show that proxies of domestic workers’ bargaining power in the international division of labour (such as the share of primary product exports) are significantly related to child labour, net of the effect of traditional controls such as parental income, quality of education, international aid, and trade liberalization. The positive impact of the share of primary product exports on child labour outlines a potential paradox. The paradox suggests that trade liberalization does not always have straightforward positive effects on social indicators and that its short‐run effects on income distribution and distribution of skills and market power across countries need to be carefully evaluated.     

Wage Dispersion and Equilibrium Search Models: Some Evidence from Italy

This paper provides a structural estimation of an equilibrium search model with on‐the‐job search and heterogeneity in firms' productivities using a sample of Italian male workers. Results indicate that arrival rates of offers for workers are higher when unemployed than when employed and firms exploit their monopsony power when setting wages. As a result, workers earn far less than their marginal product. The model is then used to study regional labour market differentials in Italy. Wide variation in frictional transition parameters across areas helps to explain persistent unemployment and wage differentials.     

Size and Characteristics of Foreign Immigration in Italy

ABSTRACT During the 1980s, Italy radically changed its position in the international migration system, from supplier of labour to user of foreign labour. But the nature of Italian immigration is different from that which has marked the post-war process of European development: new immigration flows are no longer an instrument of quantitative rebalancing of labour markets, but instead acquire a function of qualitative rebalancing in sectors where there appears to be a lack of labour supply in particular jobs and qualifications. This paper combines the information available from official sources with those obtainable by the numerous special surveys which have been carried on the phenomenon in the last few years. This framework allows us to underline — even with the limitations due to still-backward documentation — the characteristics of present immigration, by now firmly rooted in the country but still far from reaching a stable and definitive arrangement.     

Information Frictions in Trade

It is costly to learn about market conditions elsewhere, especially in developing countries. This paper examines how such information frictions affect trade. Using data on regional agricultural trade in the Philippines, I first document a number of observed patterns in trade flows and prices that suggest the presence of information frictions. I then incorporate information frictions into a perfect competition trade model by embedding a process whereby heterogeneous producers engage in a costly sequential search process to determine where to sell their produce. I show that introducing information frictions reconciles the theory with the observed patterns in the data. Structural estimation of the model finds that information frictions are quantitatively important: roughly half the observed regional price dispersion is due to information frictions. Furthermore, incorporating information frictions improves the out‐of‐sample predictive power of the model.     

A Stock-Flow Model to Analyse and Forecast Labour Market Variables

ABSTRACT: In confronting problems of employment and unemployment, students of the labour market, and economists in general have focused mainly on the determination of the level of such variables. Much less attention has been paid to such questions as: how many persons have entered the area of employment and the labour force in various time periods, and how many have exited; their sex and age distribution; and the determinants of the level and structure of flows amongst the various labour market conditions. Yet it appears superfluous to underscore the relevance of such questions. To illustrate, suffice it to recall that in Italy, the present level of employment is essentially the same today as it was in 1961‘; but this has not prevented whole generations of young people from 'stably’entering the employment area, albeit with varying degrees of difficulty in different periods. As for the numerous statistical surveys of labour market flows in a range of countries, and as for the works of job search theorists², it should be observed that such surveys and analyses essentially concern conjunctural phenomena. Consequently, these authors have paid no attention to the distinction between short-run turnover and generational turnover, or to the extremely singular characteristics of the statistical data on flows. An attempt to construct labour market models that present an integrated version of the 'structural’aspects of the market in terms of stock and flows is therefore lacking. The present study sets forth various objectives and is divided into two parts. In the first, an analysis of several controversial terminological aspects of the concepts of stock and flow is presented, and an attempt is made to point out those theoretical structures which have been responsible for the long-prevailing neglect of the labour market flows, particularly long-run flows. Then the problem of defining the concepts of short-run and generational turnover will be confronted in light of an analysis of the statistical methods used in the surveys; finally, a methodology for measuring generational flows is proposed. In the second part of the paper a model based on generational flows, as previously defined, will be presented together with a computational procedure capable to produce long run estimates of alternative scenarios of labour demand and supply and of the structure of employment by sex and age. A brief summary of some of the empirical results obtained applying our model and forecasting procedure to the Italian labour market will also be discussed in the final part of the paper.     

Permanent Disadvantage or Gradual Integration: Explaining the Immigrant–Native Earnings Gap in Sweden

Theoretical explanations suggest that wage differentials between immigrant and native workers are generated either by differences in the acquisition of human capital or by various forms of exclusion of immigrants from fair labour market rewards. We evaluate the labour quality and labour market discrimination hypotheses by using a large sample of Swedish employees in 1995. Our findings show that labour market integration is relatively unproblematic for immigrants from Western countries, whereas immigrants from other countries, especially from Africa, Asia and Latin America, face substantial obstacles to earnings progress when entering the Swedish labour market. For the latter group of countries, extensive controls for general and country‐specific human capital reduce the earnings differentials. However, the remaining gap is of a non‐trivial magnitude. Thus, the labour quality hypothesis accounts for a part of the observed native–immigrant wage gap, but the remaining differentials can be interpreted in terms of labour market discrimination.