Downward Wage Rigidity in Italy: Micro-Based Measures and Implications

23 Pages Posted: 27 Nov 2007

See all articles by Francesco Devicienti

Francesco Devicienti

University of Turin - Collegio Carlo Alberto; University of Turin - Department of Economics and Financial Sciences G. Prato

Agata Maida

University of Turin

Paolo Sestito

Bank of Italy

Abstract

Using the 1985-99 WHIP data, we find a sizable amount of downward wage rigidity in Italy, with a prevalence of real over nominal rigidity. The results hold when real rigidity is identified either with reference to collective bargaining dispositions or to price inflation. Consistently with the labor market reforms of the early 1990s, downward rigidities have become less important over time, with the reduction in real rigidities more than offsetting the rise in nominal rigidities. We also find that downward wage rigidities are positively related to labor reallocation and local unemployment rates, hinting at the macroeconomic relevance of our estimates.

Suggested Citation

Devicienti, Francesco and Maida, Agata and Sestito, Paolo, Downward Wage Rigidity in Italy: Micro-Based Measures and Implications. Economic Journal, Vol. 117, Issue 524, pp. F530-F552, November 2007. Available at SSRN: https://ssrn.com/abstract=1032366 or http://dx.doi.org/10.1111/j.1468-0297.2007.02095.x

Francesco Devicienti (Contact Author)

University of Turin - Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

University of Turin - Department of Economics and Financial Sciences G. Prato ( email )

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy

Agata Maida

University of Turin ( email )

Via Po 53
Torino, Turin - Piedmont 10100
Italy

Paolo Sestito

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
13
Abstract Views
324
PlumX Metrics