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The Impact of Local Minimum Wages on Employment: Evidence from Italy in the 1950s

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  • Guido de Blasio
  • Samuele Poy

Abstract

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.

Suggested Citation

  • Guido de Blasio & Samuele Poy, 2014. "The Impact of Local Minimum Wages on Employment: Evidence from Italy in the 1950s," FBK-IRVAPP Working Papers 2014-02, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    • Handle: RePEc:fbk:wpaper:2014-02
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    More about this item

    Keywords

    Minimum wages; Regional economic activity; Regression discontinuity;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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