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Wage adjustment by Italian firms: any difference during the crisis? A survey-based analysis

Author

Listed:
  • Silvia Fabiani

    (Banca d'Italia)

  • Roberto Sabbatini

    (Banca d'Italia)

Abstract

The study analyses wage adjustment by Italian firms on the basis of information collected through a coordinated survey carried out in 17 European countries in two waves (at the beginning of 2008 and in the summer of 2009). The pre-crisis evidence indicates that the degree of wage rigidity is relatively high in Italy: wages remain unchanged on average for about two years, against an average of just over one year in the other countries. Italian firms hardly cut nominal wages, reflecting not only institutional constraints, but also an attempt to avoid a negative impact on their productivity. During the economic recession the firms most severely affected by the fall in demand reduced their costs mainly by adjusting the input of labour (in terms of both employment and hours worked). A higher incidence of skilled and white-collar workers was accompanied by greater recourse to strategies aimed at containing non-labour costs, presumably in order to preserve the human capital accumulated.

Suggested Citation

  • Silvia Fabiani & Roberto Sabbatini, 2011. "Wage adjustment by Italian firms: any difference during the crisis? A survey-based analysis," Questioni di Economia e Finanza (Occasional Papers) 94, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:opques:qef_94_11
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2011-0094/QEF_94.pdf
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    References listed on IDEAS

    as
    1. Jan Babecký & Philip Du Caju & Theodora Kosma & Martina Lawless & Julián Messina & Tairi Rõõm, 2010. "Downward Nominal and Real Wage Rigidity: Survey Evidence from European Firms," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(4), pages 884-910, December.
    2. Philip Du Caju & Erwan Gautier & Daphne Momferatu & Melanie Ward-Warmedinger, 2009. "Institutional Features of Wage Bargaining in 23 European Countries, the US and Japan," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 12(2), pages 57-108, Winter.
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    Cited by:

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    2. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    3. Adalgiso Amendola & Anna Maria Ferragina & Rosanna Pittiglio & Filippo Reganati, 2012. "Are exporters and multinational firms more resilient over a crisis? First evidence for manufacturing enterprises in Italy," Economics Bulletin, AccessEcon, vol. 32(3), pages 1914-1926.
    4. Anna Ferragina & Fernanda Mazzotta, 2018. "Firm Employment Resilience and FDI: Evidence from Italy," L'industria, Società editrice il Mulino, issue 4, pages 523-556.
    5. Francesco D�Amuri & Silvia Fabiani & Roberto Sabbatini & Raffaele Tartaglia Polcini & Fabrizio Venditti & Eliana Viviano & Roberta Zizza, 2015. "Wages and prices in Italy during the crisis: the firms� perspective," Questioni di Economia e Finanza (Occasional Papers) 289, Bank of Italy, Economic Research and International Relations Area.
    6. Belloc, Filippo & D’Antoni, Massimo, 2020. "The Elusive Effect of Employment Protection on Labor Turnover," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 11-25.
    7. Druant, Martine & Fabiani, Silvia & Kezdi, Gabor & Lamo, Ana & Martins, Fernando & Sabbatini, Roberto, 2012. "Firms' price and wage adjustment in Europe: Survey evidence on nominal stickiness," Labour Economics, Elsevier, vol. 19(5), pages 772-782.
    8. Bennet Berger & Guntram B. Wolff, 2017. "The global decline in the labour income share- is capital the answer to Germany’s current account surplus?," Policy Contributions 20285, Bruegel.

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    More about this item

    Keywords

    survey; wage rigidity; economic recession;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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