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Firm level wage bargaining and territorial wage differentials: evidence from the Bank of Italy survey on firms

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  • Casadio Piero

Abstract

Collective bargaining at company level has not been particularly widespread, especially at small firms and in the South. The Bank of Italy's survey shows that performance-related wage premia have been paid irregularly and have involved only small amounts. Nevertheless they have fostered a gradual widening of regional and skill-based wage differentials. In 2002-07 the earnings items set at company level, in addition to the contractual minimums, averaged 14.9 per cent in industrial firms; 6.7 per cent only for firms below 50 workers. Controlling for firm size and characteristics, the company-level component of earnings was some 5-6 percentage points lower in the South than in the North for production workers and 8-9 points for clerical workers. The original finding of the study is that just 10 per cent of employees in the North earn only the nationally fixed contractual minimum, compared with 30 per cent in the Centre and over 40 per cent in the South. A short examination of geographical wage differentials, controlling for sector, and firm size concludes.

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Bibliographic Info

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

Volume (Year): (2010)
Issue (Month): 2 ()
Pages: 241-292

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Handle: RePEc:mul:je8794:doi:10.1429/32534:y:2010:i:2:p:241-292

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Keywords: wage bargaining; firm-level contracts; territorial wage differentials;

References

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  1. Piero CASADIO & Maria LAMELAS & Giorgio RODANO, 2005. "Cambiamento istituzionale, salari e flessibilità: l’esperienza della concertazione in Italia," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 113(2), pages 185-214.
  2. Piero, Casadio, 2003. "Wage formation in the Italian private sector after the 1992-93 income policy agreements," MPRA Paper 29396, University Library of Munich, Germany.
  3. Checchi, Daniele & Pagani, Laura, 2004. "The Effects of Unions on Wage Inequality: The Italian Case in the 1990s," IZA Discussion Papers 1385, Institute for the Study of Labor (IZA).
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  6. repec:rie:review:v:8:y:2003:i:2:n:7 is not listed on IDEAS
  7. Sergio DESTEFANIS & Giuseppe MASTROMATTEO & Giovanni VERGA, 2005. "Wages and Monetary Policy in Italy Before and After the Wage Agreements," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 113(2), pages 289-318.
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  9. Andrea Brandolini & Piero Casadio & Piero Cipollone & Marco Magnani & Alfonso Rosolia, 2007. "Employment Growth in Italy in the 1990s: Institutional Arrangements and Market Forces," AIEL Series in Labour Economics, in: Nicola Acocella & Riccardo Leoni (ed.), Social Pacts, Employment and Growth. A Reappraisal of Ezio Tarantelli’s Thought, edition 1, chapter 4, pages 31-68 AIEL - Associazione Italiana Economisti del Lavoro.
  10. Carlo Dell'Aringa & Laura Pagani, 2007. "Collective Bargaining and Wage Dispersion in Europe," British Journal of Industrial Relations, London School of Economics, vol. 45(1), pages 29-54, 03.
  11. Origo, Federica, 2009. "Flexible pay, firm performance and the role of unions. New evidence from Italy," Labour Economics, Elsevier, vol. 16(1), pages 64-78, January.
  12. Annalisa Cristini & Riccardo Leoni, 2007. "The ’93 July Agreement in Italy: Bargaining Power, Efficiency Wages or Both?," AIEL Series in Labour Economics, in: Nicola Acocella & Riccardo Leoni (ed.), Social Pacts, Employment and Growth. A Reappraisal of Ezio Tarantelli’s Thought, edition 1, chapter 6, pages 97-119 AIEL - Associazione Italiana Economisti del Lavoro.
  13. William Greene, 2004. "The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects," Econometrics Journal, Royal Economic Society, vol. 7(1), pages 98-119, 06.
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