The resurrection of the Italian wage curve

Devicienti, Francesco; Maida, A.; Pacelli, Lia

doi:10.1016/j.econlet.2007.05.013

Cited by 38 publications

(31 citation statements)

References 6 publications

(14 reference statements)

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“…Sanz-de-Galdeano and Turunen (2006) find for the euro-area, on the other hand, that wages of workers at the bottom of the distribution are more responsive to the local unemployment rate and suggest wage curve elasticity decreases along the wage distribution. Devicienti, Maida, and Pacelli (2008) using data for Italy find lower wage sensitivity in the middle range of the distribution, following an inverse U-shape along the wage distribution.…”

Section: Estimation Methodsmentioning

confidence: 95%

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

İlkkaracan

Levent

Polat

2013

International Review of Applied Economics

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In this paper we use Turkish household labor force data to address a number of conceptual issues pertaining to the wage curve, an empirically derived negative relationship between the real wage level and the local unemployment rate. First, we show that in developing economies where labor markets are prone to high degree of segmentation by skill level, local unemployment rates disaggregated by education provide more accurate measures of the degree of group-specific wage competition and hence yield more robust results of the wage curve analyses. Second, we estimate the wage curve using various definitions of the unemployment rate, including discouraged and marginally attached workers, and the long-term unemployment rate to explore the most relevant measure of local labor market tension in the wage setting process. We find that broader definitions of unemployment serve as a more effective reference point in measuring wage flexibility for women, whose attachment to the labor market is substantially weak in the Turkish context; while for men the official and long-term unemployment rates perform well. Finally, using quantile regression we show that wage responsiveness to unemployment cannot be assumed to be constant along the wage distribution. In the Turkish case, we find a higher unemployment elasticity of wages around the median segment of wage distribution. This effect is more pronounced for women.

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Section: Estimation Methodsmentioning

confidence: 95%

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

İlkkaracan

Levent

Polat

2013

International Review of Applied Economics

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“…However, Devicienti et al . () find that, overall, the amount of flexibility in bargaining agreements introduced by the 1993 reform has been quite limited. In particular, using a sample covering around 60 per cent of national private‐sector contracts, these authors show that the average share of all top‐up components over total wages increased from around 18 per cent during the mid‐1980s, to only 22 per cent by the end of the 1990s.…”

Section: Institutional Contextmentioning

confidence: 99%

Collective Bargaining and the Evolution of Wage Inequality in Italy

Devicienti

Fanfani

Maida

2018

Brit J Industrial Rel

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Italian male wage inequality has increased at a relatively fast pace from the mid‐1980s until the early 2000s, while it has been persistently flat since then. We analyse this trend, focusing on the period of most rapid growth in pay dispersion. By accounting for worker and firm fixed effects, it is shown that workers' heterogeneity has been a major determinant of increased wage inequalities, while variability in firm wage policies has declined over time. We also show that the growth in pay dispersion has entirely occurred between livelli di inquadramento, that is, job titles defined by national industry‐wide collective bargaining institutions, for which specific minimum wages apply. We conclude that the underlying market forces determining wage inequality have been largely channelled into the tight tracks set by the centralized system of industrial relations.

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“…This is already an important change in the (perverse) relationship between real wages and unemployment typical of the previous period already noted in Costantini and De Nardis (2006), who find the re-emergence of a negative sign, and Devicienti et al (2008), who see a resurrection of the wage curve. Figure 6 shows that the Phillips curve, expressed here in terms of real (not nominal) wage changes, is highly unstable.…”

Section: [Figure 5 About Here]mentioning

confidence: 93%

“…It is also worth mentioning that Devicienti et al (2008) also find the re-emergence of a wage curve effect -meaning a negative coefficient of monthly wages with respect to local unemployment -in the post-1993 period, pointing to increased wage flexibility which they attribute to the new regime of industrial relations.…”

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confidence: 99%

Assessing the impact of incomes policy: the Italian experience

Pastore

2010

International Journal of Manpower

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu (1985), which reduced the automatisms of scala mobile, started a process of redefinition of wage fixing in Italy, which culminated with the final abolition of scala mobile (1992) and the approval of Protocollo d 'intesa (1993). Since then, following New Corporatist principles, a national system of centralised wage bargaining (concertazione) and the so-called "institutional indexation" have governed the determination of wages. This paper aims to assess the impact of such incomes policy agreements on the long and short run equilibrium relationship between real wages, labour productivity and unemployment. Different time series econometric tools confirm that incomes policy has altered the relationship between real wages and productivity, generating not only a permanent downward impact on prices, but also on real wages. In a sense, incomes policy has caused a new form of (upward) wage rigidity. Interestingly, no impact of incomes policy on the weak relationship between real wages and unemployment is detected. The analysis calls for a careful revision of the 1993 Protocol aimed at: a) better protecting the purchasing power of real wages without losing control on inflation; b) introducing growth generating mechanisms. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: C22, E12, E25, E64, E65

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The resurrection of the Italian wage curve

Abstract: We show that the Italian wage curve, inexistent in the eighties and early nineties, has reemerged after the 1993 Income Policy Agreements, owing to the greater role granted to ‡exible and locally bargained top-up wage components.

Cited by 38 publications

References 6 publications

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

Exploring different measures of wage flexibility in a developing economy context: the case for Turkey

Collective Bargaining and the Evolution of Wage Inequality in Italy

Assessing the impact of incomes policy: the Italian experience

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