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The impact of local minimum wages on employment: evidence from Italy in the 1950s

  • Guido de Blasio


    (Bank of Italy)

  • Samuele Poy



This paper measures the impact of wage zones � minimum wage differentials at the province level � on Italy's local labor markets during the 1950s. Using a spatial regression discontinuity design, it finds that for the industrial sectors covered under wage zones there was an increase in employment when one crossed the border from a high-wage province into a low-wage one; the effect diminished, however, as the distance from the boundary increased. The paper also illustrates that the impact on the overall (non-farm) private sector, which includes both covered and uncovered sectors, was basically zero. On balance, the scheme generated some reallocation of economic activity, albeit confined to areas close to the province border.

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Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 953.

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Date of creation: Mar 2014
Date of revision:
Handle: RePEc:bdi:wptemi:td_953_14
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  1. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast Food Industry," NBER Working Papers 3997, National Bureau of Economic Research, Inc.
  2. Manning, Alan, 2003. "The real thin theory: monopsony in modern labour markets," Labour Economics, Elsevier, vol. 10(2), pages 105-131, April.
  3. Antonio Accetturo & Alberto Dalmazzo & Guido De Blasio, 2010. "North-South Imbalances: Policies in a Spatial Equilibrium," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(2), pages 3-36, July.
  4. Daniel S. Hamermesh, 1993. "Labor Demand and the Source of Adjustment Costs," NBER Working Papers 4394, National Bureau of Economic Research, Inc.
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  7. Duranton, Gilles & Gobillon, Laurent & Overman, Henry G, 2006. "Assessing the Effects of Local Taxation Using Microgeographic Data," CEPR Discussion Papers 5856, C.E.P.R. Discussion Papers.
  8. Sandra E. Black, 1997. "Do better schools matter? Parental valuation of elementary education," Research Paper 9729, Federal Reserve Bank of New York.
  9. Giuseppe Albanese & Guido de Blasio, 2014. "Civic Capital and Development: Italy, 1951-2001," Quaderni di storia economica (Economic History Working Papers) 32, Bank of Italy, Economic Research and International Relations Area.
  10. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, 08.
  11. Deere, Donald & Murphy, Kevin M & Welch, Finis, 1995. "Employment and the 1990-1991 Minimum-Wage Hike," American Economic Review, American Economic Association, vol. 85(2), pages 232-37, May.
  12. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule To Estimate The Effect Of Class Size On Scholastic Achievement," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 533-575, May.
  13. Ben Dachis & Gilles Duranton & Matthew A. Turner, 2012. "The effects of land transfer taxes on real estate markets: evidence from a natural experiment in Toronto," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 327-354, March.
  14. Janet Currie & Bruce C. Fallick, 1996. "The Minimum Wage and the Employment of Youth Evidence from the NLSY," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 404-428.
  15. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
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  19. repec:cup:cbooks:9780521586115 is not listed on IDEAS
  20. Sergio DESTEFANIS & Giuseppe MASTROMATTEO & Giovanni VERGA, 2005. "Wages and Monetary Policy in Italy Before and After the Wage Agreements," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 113(2), pages 289-318.
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  25. Guido Imbens & Thomas Lemieux, 2007. "Regression Discontinuity Designs: A Guide to Practice," NBER Technical Working Papers 0337, National Bureau of Economic Research, Inc.
  26. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
  27. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
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