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Labor Market Reform and Rent-sharing: A Quasi-experiment Experience

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  • Ambra Poggi
  • Rosella Nicolini

Abstract

We analyze the impact on wages of the adoption of a rent-sharing remuneration scheme aimed at making labor institutions more flexible. We work within a quasi-experimental setting referring to a sample of Italian companies before and after the introduction of the Treu Reform (1997). Our estimations confirm that this reform not only increased insider workers' wages via rent-sharing, but also fueled a σ−convergence process of the rent-sharing elasticity across the sectors at a different rate. Finally, we deliver a reasoned discussion of the consequences of implementing this reform on the Italian job market. This reform produced advances in the quality of job remuneration but it deepened a structural gap in the Italian labor market composition.

Suggested Citation

  • Ambra Poggi & Rosella Nicolini, 2016. "Labor Market Reform and Rent-sharing: A Quasi-experiment Experience," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(4), pages 618-631.
    • Handle: RePEc:oup:apecpp:v:38:y:2016:i:4:p:618-631.
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    References listed on IDEAS

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    1. Alessia Matano & Paolo Naticchioni, 2011. "Is There Rent Sharing in Italy? Evidence from Employer-Employee Data," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 265-279, December.
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    5. Margolis, David N. & Salvanes, Kjell G., 2001. "Do Firms Really Share Rents with Their Workers?," IZA Discussion Papers 330, Institute of Labor Economics (IZA).
    6. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    7. Strozzi, Chiara & Pistoresi, Barbara, 2001. "Rent Sharing in Wage Determination: Evidence from Italy," CEPR Discussion Papers 2939, C.E.P.R. Discussion Papers.
    8. Quah, Danny, 1993. " Galton's Fallacy and Tests of the Convergence Hypothesis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 427-443, December.
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    Cited by:

    1. Edinson Tolentino, 2022. "An evaluation of a mandatory profit-sharing reform in Peru, using quasi-experimental methods," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 313-334, June.

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    More about this item

    Keywords

    Rent-sharing; convergence; IV estimation;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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