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The effects of unions on wage inequality. The Italian case in the 1990's

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  • Daniele CHECCHI
  • Laura PAGANI

Abstract

In this paper we analyse the contribution of union activity to reducing earnings inequality. Given the specific nature of the system of industrial relations, Italian unions may contribute to inequality reduction through either national bargaining (i. e. reducing between-sector differentials) and/or local bargaining (i. e. reducing within-establishment inequality). After reviewing aggregate evidence on the first dimension, we explore the second route making use of matched employer-employees data-set, surveyed in 1995 by Eurostat. We pay great care to the potential endogeneity of local bargaining, and we find that the widespread adoption of local bargaining, by reducing the implicit price of individual characteristics, effectively contributes to inequality reduction.

Suggested Citation

  • Daniele CHECCHI & Laura PAGANI, 2004. "The effects of unions on wage inequality. The Italian case in the 1990's," Departmental Working Papers 2004-29, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2004-29
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    References listed on IDEAS

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    2. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555, Elsevier.
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    6. Christopher Erickson & Andrea Ichino, 1995. "Wage Differentials in Italy: Market Forces, Institutions, and Inflation," NBER Chapters, in: Differences and Changes in Wage Structures, pages 265-306, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Juan Francisco Canal Domínguez & César Rodríguez Gutiérrez, 2016. "Collective bargaining, wage dispersion and the economic cycle: Spanish evidence," The Economic and Labour Relations Review, , vol. 27(4), pages 471-489, December.
    2. Carlo Dell’Aringa & Laura Pagani, 2007. "Collective Bargaining and Wage Dispersion in Europe," British Journal of Industrial Relations, London School of Economics, vol. 45(1), pages 29-54, March.

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