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Public Sector Pay And Regional Competitiveness. A First Look At Regional Public-Private Wage Differentials In Italy

  • CARLO DELL'ARINGA
  • CLAUDIO LUCIFORA
  • FEDERICA ORIGO

In this paper we investigate regional public-private wage differentials in Italy. Following the recent wave of reforms that significantly changed wage setting and employment relations in both sectors-increasing decentralization in collective bargaining and enforcing a 'privatization' of public sector employment contracts-we present new estimates of the public-private wage gap by geographical location. We report both 'standardized' public-private wage differentials and estimates obtained using geographically weighted regression methods. We show that significant differences exist in public-private wage differentials across Italian regions, and that the latter can be partly explained by local labour market conditions affecting the private sector and only marginally the public sector. Differences in public-private wage differentials across regions are expected to determine several imbalances in terms of 'wait' unemployment and recruitment problems in the different areas. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd and The University of Manchester.

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Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 75 (2007)
Issue (Month): 4 (07)
Pages: 445-478

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Handle: RePEc:bla:manchs:v:75:y:2007:i:4:p:445-478
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  1. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
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  7. repec:rie:review:y:1999:v:1:i:1 is not listed on IDEAS
  8. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
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  11. Lucifora Claudio & Origo Federica, 1999. "Alla ricerca della flessibilità: un'analisi della curva dei salari in Italia," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 3-36.
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