Fixed Exchange-Rate Policy and Real Wage Growth: Quasi-Experimental Evidence

42 Pages Posted: 30 Dec 2014

See all articles by Corrado Andini

Corrado Andini

IZA Institute of Labor Economics

Abstract

Using Difference-in-Differences estimation and data from the European Community Household Panel, this paper suggests that the fixed exchange-rate policy adopted by Italy in the 1997-2000 period has reduced the real hourly wage growth of Italian full-time workers with permanent contracts, on average, by 3%. Yet, the cost of the policy has been ultimately paid by the private sector where real wage growth has decreased by 5.4%.

Keywords: difference-in-differences, productivity, wages

JEL Classification: J31, C23

Suggested Citation

Andini, Corrado, Fixed Exchange-Rate Policy and Real Wage Growth: Quasi-Experimental Evidence. IZA Discussion Paper No. 8701. Available at SSRN: https://ssrn.com/abstract=2543895

Corrado Andini (Contact Author)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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