Wage structure in Italian Manufacturing firms. LEM Working Paper 2007-05, Scuola Speriore Sant’Anna

This paper jointly considers some pieces of evidence regarding peculiarities of in-dustries ’ structure which are often separately addressed. Italian industrial sectors are known to be characterized by a high proportion of small enterprises that suffers from “constraints to growth”. We look at the interplay of variables accounting for size, pro-ductivity and labor cost, and assess the relevance of labor force structure in determining the structure of cost for wage. We start by exploring the firm size-wage effect in Italian manufacturing sectors and investigate the extent to which such a trend is offset by a positive and counterbalancing relation linking together productivity and size. We in-vestigate how size contributes to the wage differential within a firm on the earnings of distinct categories of employees. The empirical findings we present reveal that labor force structure matters in determining the wage cost structure of firms.