Publication

This paper estimates a model of the relative demand for skilled labor based on the notion of outsourcing. This model identifies the roles of technological change and trade in skill upgrading. The results show that economic variables played little or no role in determining the relative demand for unskilled workers in the 1970s in Italy. In the 1980s and 1990s, following some labor market reforms, the authors find that international competition had a significant effect on the relative demand for blue-collar workers in Italy’s skilled intensive sectors.