We use a new data set on Italy and a novel identification strategy to analyse the relationship between migrants' employment status and the percentage of non-Italians living nearby. Our data contain information at the very local level and are representative of both legal and illegal migrants. Identification exploits the physical characteristics of local buildings as a source of exogenous variation in the incidence of migrants. We find that migrants residing in more immigrant-dense areas are less likely to be employed. This penalty is higher if the migrants leaving nearby are illegal and it is not mitigated if they are from own ethnic group or more proficient in Italian.

This paper analyses the effects of raising the statutory full retirement age on the labour force participation of middle-aged individuals and their partners. Identification relies on a difference-in-differences setting that exploits the large heterogeneous increase in the age eligibility for retirement caused by an unexpected Italian pension reform. We detect a sizeable increase in the participation rate of middle-aged women that spills over into their husbands' labour supply, who choose to postpone their retirement decision.

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Increasing the number of Science, Technology, Engineering and Math (STEM) university graduates is considered a key element for long-term productivity and competitiveness in the global economy. Still, little is known about what actually drives and shapes students' choices. This paper focusses on secondary school students at the very top of the ability distribution and explores the effect of more exposure to science on enrolment and persistence in STEM degrees at the university and on the quality of the university attended. The paper overcomes the standard endogeneity problems by exploiting the different timing in the implementation of a reform that induced secondary schools in the UK to offer more science to high ability 14 year-old children. Taking more science in secondary school increases the probability of enrolling in a STEM degree by 1.5 percentage point and the probability of graduating in these degrees by 3 percentage points. The results mask substantial gender heterogeneity: while girls are as willing as boys to take advanced science in secondary school-when offered-, the effect on STEM degrees is entirely driven by boys. Girls are induced to choose more challenging subjects, but still the most female-dominated ones.

Aggregate wages display little cyclicality compared with what a standard model would predict. Wage rigidities are an obvious candidate, but a recent strand of the literature has emphasized the need to take into account the growing importance of worker composition effects during downturns. With reference to the Italian case we document that firm composition effects also matter increasingly in explaining aggregate wage dynamics, i.e. aggregate wage growth has been raised by the increase in the employment weight of highwage firms. To the extent that this reallocation occurs towards more productive firms, the composition effects may also reflect an efficiency enhancing mechanism. We use a newly available dataset based on social security records covering the universe of Italian employers from 1990 to 2013 and employ a standard measure of allocative efficiency on wages paid across firms. We show that this measure has improved progressively since before the recent downturn, being aligned at the sectoral level with measures of productivity growth and market openness to competition. We then focus on the recent downturn and find that large firms were able to adjust wages more than small firms and that small firms instead adjusted employment to a larger extent. Finally, we document that the continued improvement in the measure of allocative efficiency over this period correlates positively with measures of economic activity (evolution of employment and value added) across sectors.