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Dynamics of productivity and cost of labor in Italian Manufacturing firms

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  • Giulio Bottazzi
  • Marco Grazzi

Abstract

This paper studies the impact of size on labor cost and productivity for Italian man- ufacturing firms. The distributions of both labor cost and productivity display a wide support, even when disaggregated by sector of industrial activity. Further, both labor cost and productivity, when considered alone, are growing with the size of the firm. We investigate this relationship on a new set of data and we are able to show that once ac- counted for productivity differences among firms, size still retains a positive effect on cost of labor in most of the sectors considered.

Suggested Citation

  • Giulio Bottazzi & Marco Grazzi, 2013. "Dynamics of productivity and cost of labor in Italian Manufacturing firms," LEM Papers Series 2013/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2013/02
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    References listed on IDEAS

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    Cited by:

    1. Antonelli, Cristiano & Scellato, Giuseppe, 2019. "Wage inequality and directed technological change: Implications for income distribution," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 59-65.

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    More about this item

    Keywords

    Size-wage effect; Labor productivity;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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