Wage Rigidity in Italy

UNIMI Economics Working Paper No. 18.2004

Posted: 29 Dec 2004

See all articles by Orietta Dessy

Orietta Dessy

University of Milan - Department of Business Policy and Economics

Date Written: May 2004


In this study we analyse wage rigidity at the individual level in Italy, presenting evidence from the 1989-1995 Survey of the Bank of Italy. A deep statistical analysis is carried out, replicating previous approaches by McLaughlin, Card and Hyslop and Kahn over similar US data. We also propose new, simple tests for wage rigidity. The different approaches adopted seem to go in the same the direction of showing a relevant, persistent degree of nominal wage rigidity in Italy. The extent of wage rigidity is significant not only for employees staying in the same firm, but also for movers. At the same time, wages are not completely downwardly rigid: a certain percentage of wage cuts is reported by individuals.

Keywords: Wage rigidity, movers, stayers

JEL Classification: J30, J38

Suggested Citation

Dessy, Orietta, Wage Rigidity in Italy (May 2004). UNIMI Economics Working Paper No. 18.2004, Available at SSRN: https://ssrn.com/abstract=634103 or http://dx.doi.org/10.2139/ssrn.634103

Orietta Dessy (Contact Author)

University of Milan - Department of Business Policy and Economics ( email )

Milano, I-20122

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