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Labour market frictions across worker types

Author

Listed:
  • Mauro Caselli

    (Università di Trento)

  • Andrea Locatelli

    (Banca d’Italia)

  • Stefano Schiavo

    (Università di Trento)

Abstract

We analyze the patterns and evolution of labour market frictions in Italy over the period 2002–2019, distinguishing between white- and blue-collar workers. For both types of employees, we document a fall in the wedge between the marginal revenue product of labour (MRPL) and labour costs over the sample period. Such a decline hints to changes in the labour market that favour workers over firms. In the most recent years, the cost of blue-collar workers is about 10% above their MRPL, while white-collar workers’ are paid about 10% below their MRPL. We find significant heterogeneity across economic sectors and Italian regions, with higher labour wedges in the southern part of the country for both white- and blue-collar workers.

Suggested Citation

  • Mauro Caselli & Andrea Locatelli & Stefano Schiavo, 2025. "Labour market frictions across worker types," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 42(3), pages 799-827, October.
    • Handle: RePEc:spr:epolit:v:42:y:2025:i:3:d:10.1007_s40888-025-00376-z
    DOI: 10.1007/s40888-025-00376-z
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    Keywords

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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