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Examines skill demand and its impact on wage inequality, suggesting significant market implications.
We study the relationship between skill demand and wage inequality, and its association with worker and firm heterogeneity, across province‐by‐sector‐by‐occupation labor market cells. Combining Italian linked employer–employee data with aggregate skill requirements from online vacancies, we find a strong positive relationship between wages and demand for cognitive and social skills, especially when jointly required, highlighting their complementarity. When both skills are demanded more, higher wages are driven by AKM worker effects—reflecting the higher market value of a hybrid skill set—rather than firm pay, whereas higher specialized skill demand is associated with larger firm premiums but lower market‐level valuations.
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Grasso et al. (2026) studied this question.
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