Urban Wage Premia, Cost of Living, and Collective Bargaining

61 Pages Posted: 23 Jan 2020

See all articles by Marianna Belloc

Marianna Belloc

Sapienza University of Rome - Department of Economics

Paolo Naticchioni

University of Rome I; University of Cassino

Claudia Vittori

University of Rome La Sapienza

Date Written: November 2019

Abstract

In this paper, we estimate the urban wage premia (UWP) in Italy, with its economy characterized by the interplay between collective bargaining and spatial heterogeneity in the cost of living. We implement a reduced-form regression analysis using both nominal and real (in temporal and spatial terms) wages. Our dataset for the 2005-2015 period includes, for workers’ characteristics, unique administrative data provided by Italian Social Security Institute and, for the local CPI computation, housing prices collected by Italian Revenue Agency. For employees covered by collective bargaining, we find a zero UWP in nominal terms and a negative and non-negligible UWP in real terms (-2.6% when all controls are included). To capture the role played by centralized wage settings, we also consider various groups of self-employed workers, who are not covered by national labour agreements, while living in the same locations and enjoying the same amenities as employees. We find that, differently from employees, self-employed workers enjoy a positive UWP in nominal terms, and do not suffer from urban real wage penalties. Results hold under a large array of robustness checks.

Keywords: urban wage premium, cost of living, collective bargaining

JEL Classification: R120, R310, J310

Suggested Citation

Belloc, Marianna and Naticchioni, Paolo and Vittori, Claudia, Urban Wage Premia, Cost of Living, and Collective Bargaining (November 2019). CESifo Working Paper No. 7253, Available at SSRN: https://ssrn.com/abstract=3275427

Marianna Belloc (Contact Author)

Sapienza University of Rome - Department of Economics ( email )

Via del Castro Laurenziano 9
Rome, 00161
Italy

Paolo Naticchioni

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

University of Cassino ( email )

Cassino
Italy

Claudia Vittori

University of Rome La Sapienza ( email )

Via del Castro Laurenziano
Roma, Rome 00161
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
27
Abstract Views
211
PlumX Metrics