INTERINDUSTRY AND OCCUPATIONAL WAGE DIFFERENTIALS IN ITALY

The vast literature on wage determination in the post-war era extensively documents the existence of large and persistent wage differentials among industries and workers of comparable skills' ThiS paper addresses the issue of wage dispersion in the context of the Italian economy. The stability over time of industry relative wages confirms previous results obtained for other countries. A wide class of earnings equations is estimated using microdata for the Italian manufacturing industry. The results provide little evidence in support of the view that wage dispersion can be explained by either unmeasured workers' characteristics or by compensating wage differentials. Conversely, the estimated pattern of industry-occupation wage differentials is consistent with the existence of rent sharing mechanisms and fairness considerations.