The College Wage Premium in Italy: Gender and Regional Heterogeneity in Returns to Higher Education

This thesis estimates the wage premium associated with holding a college degree in Italy and examines whether that premium varies by gender and by macro-region. Using pooled data from the 2016 and 2022 waves of the Bank of Italy's Survey on Household Income and Wealth (SHIW), the analysis estimates a Mincer-style earnings equation by Ordinary Least Squares (OLS) for a sample of 8,204 wage-earners aged 25 to 60. The baseline (preferred) specification yields a college wage premium of 45.5%, controlling for potential experience, gender, region, and survey wave. When the sample is split by gender, the OLS premium is 47.9% for men and 42.8% for women; however, because female labour force participation in Italy is comparatively low and non-random, a Heckman (1979) two-step correction is applied to the female subsample, raising the corrected premium to 50.2% and indicating that uncorrected OLS understates the true return to education for women. By contrast, splitting the sample by macro-region shows no statistically significant difference in the relative college premium between the North-Centre (44.4%) and the South (46.7%), even though workers in the South face a substantial wage-level penalty of around 11 to 12 percentage points regardless of education. The results are robust to alternative wage definitions, the exclusion of part-time workers, and the inclusion of a survey-wave fixed effect; a credible instrumental-variable strategy is not feasible with the available data, a limitation discussed explicitly in the analysis. Taken together, the findings suggest that the main obstacle to closing Italy's gender gap in returns to education is unequal labour market participation rather than unequal rewards to a given qualification, and that the South's wage disadvantage operates through the general level of pay rather than through a weaker return to college specifically. These distinctions carry different policy implications: participation-oriented interventions (childcare provision, parental leave, flexible work) for the gender gap, and demand-side interventions (firm productivity, private-sector development) for the regional gap.