In this paper we use individual micro data on workers combined with industry and regional data to study the wage dynamics of skilled and unskilled workers in Italy in the period 1991-1998. Being different to previous empirical studies, our data allow us to explore in a unique framework the role of many of the factors indicated in the literature as possible causes of the widening of the wage gap between skilled and unskilled workers: changes in the individual characteristics of workers, changes in the institutions of the labour market, increasing international integration and skill-biased technological progress._x000d_ Our results show that international integration, both in terms of trade in goods and in terms of international labour mobility, plays a role in determining the wage dynamics of skilled (white collar) and of unskilled (blue collar) workers. _x000d_ In addition, in line with the research in labour economics, our findings show that the individual characteristics of workers, and the institutional variables matter more in explaining skilled and unskilled wage dynamics than differential wage one._x000d_ _x000d_ JEL Classification: J31, F16_x000d_ _x000d_ Keywords: Skilled and unskilled wages, individual characteristics, labour market institutions, international trade.
