Wage returns to experience and tenure for young men in Italy

This paper provides estimates of wage returns to experience-, firm-, sector- and occupation-specific tenure for a sample of young Italian male workers. By comparing returns obtained using different estimators, I evaluate the importance of endogeneity and selection problems generated by specific unobserved components and individual fixed effects. After controlling for the role of collective bargaining agreements and occupation categories, results indicate that general labour market experience is the fundamental source of wage growth for blue and white collars, while returns to firm tenure are insignificant. There is some evidence of positive returns to sector and occupational tenure for white collars. Estimates from different sectors suggest that union coverage can be relevant in offsetting the role of search and matching in wage determination.