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The employment effects of collective wage bargaining

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  • Fanfani, Bernardo

Abstract

This study examines the wage and employment effects of Italian collective wage bargaining. It analyzes monthly data on the population of private-sector employees, matched with the information on contractual pay levels set by industry-wide agreements, which were bargained by the representatives of trade unions and employers at the national level. The research design exploited the generalized wage growth induced by changes in the contractual pay levels, whose timing and size differ across collective agreements. The specification adopted compared the outcomes of interest within sectors and geographical locations, and among workers subject to different collective contracts. The study results show that contractual wage growth raised the actual pay levels and had significant negative effects on employment. These employment effects were broadly consistent with the Hicks–Marshall laws and with several hypotheses of traditional centralized wage bargaining models.

Suggested Citation

  • Fanfani, Bernardo, 2023. "The employment effects of collective wage bargaining," Journal of Public Economics, Elsevier, vol. 227(C).
    • Handle: RePEc:eee:pubeco:v:227:y:2023:i:c:s0047272723001883
    DOI: 10.1016/j.jpubeco.2023.105006
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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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