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The effects of unions on wage inequality. The Italian case in the 1990s

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  • Checchi Daniele
  • Pagani Laura

Abstract

In this paper we analyse the contribution of union activity to reducing earnings inequality. Given the specific nature of the system of industrial relations, Italian unions may contribute to inequality reduction through either national bargaining (i.e. reducing betweensector differentials) and/or local bargaining (i.e. reducing within-establishment inequality). After reviewing aggregate evidence on the first dimension, we explore the second route making use of matched employer-employees data-set, surveyed in 1995 by Eurostat. We pay great care to the potential endogeneity of local bargaining, and we find that the widespread adoption of local bargaining, by reducing the implicit price of individual characteristics, effectively contributes to inequality reduction.

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Bibliographic Info

Article provided by Società editrice il Mulino in its journal Politica economica.

Volume (Year): (2005)
Issue (Month): 1 ()
Pages: 43-70

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Handle: RePEc:mul:je8794:doi:10.1429/19577:y:2005:i:1:p:43-70

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  1. Eswar Prasad & Francesca Utili, 1998. "The Italian Labor Market: Stylized Facts, Institutions, and Directions for Reform," IMF Working Papers 98/42, International Monetary Fund.
  2. Christopher L. Erikson & Andrea Ichino, 1994. "Wage Differentials in Italy: Market Forces, Institutions, and Inflation," NBER Working Papers 4922, National Bureau of Economic Research, Inc.
  3. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
  4. Andrea Brandolini, 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Data Quality, and the Time Pattern of Income Inequality," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 58(2), pages 183-239, September.
  5. Claudio Lucifora, 1999. "Wage Inequalities and Low Pay: The Role of Labour Market Institutions," Working Papers 1999.13, Fondazione Eni Enrico Mattei.
  6. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461 Elsevier.
  7. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, October.
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Cited by:
  1. Piero, Casadio, 2010. "Contrattazione aziendale integrativa e differenziali salariali territoriali: informazioni dall'indagine sulle imprese della Banca d'Italia," MPRA Paper 29384, University Library of Munich, Germany.
  2. Robert Plasman & Michael Rusinek & François Rycx, 2006. "Wages and the bargaining regime under multi-level bargaining: Belgium, Denmark and Spain," DULBEA Working Papers 06-01.RS., ULB -- Universite Libre de Bruxelles.
  3. Casadio Piero, 2010. "Firm level wage bargaining and territorial wage differentials: evidence from the Bank of Italy survey on firms," Politica economica, Società editrice il Mulino, issue 2, pages 241-292.
  4. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.

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