Wage Mobility and Dynamics in Italy in the 90&Apos;S

27 Pages Posted: 14 Apr 2007 Last revised: 7 Feb 2021

See all articles by Bruno Contini

Bruno Contini

University of Turin, Collegio Carlo Alberto, LABORatorio R. Revelli, Centre for Employment Studies, IZA; IZA Institute of Labor Economics

Roberto Leombruni

LABORatorio R. Revelli - Centre for Employment Studies

Lia Pacelli

University of Turin - Department of Economics and Financial Sciences G. Prato; LABORatorio R. Revelli, Centre for Employment Studies

Claudia Villosio

LABORatorio R. Revelli, Centre for Employment Studies; R&P Ricerche e Progetti

Date Written: April 2007

Abstract

Inspite of the centralized nature of wage bargaining in Italy, we find some evidence suggesting the existence of firm-wage policies. Firstly, the ratio of the between-firm wage variability relative to total wage variability is sizeable, and not very dissimilar from that reported for other countries. Secondly, the tide raising all boats is quite suggestive: not only do individual wages throughout the whole distribution increase as average firm wages increases, but the spread increases too. Firm wage policy matters in shaping not only the wage level distribution but also the wage change distribution. The within-firm s.d. of wage change is almost as high as that of individual wage change, and much higher than between-firm variability of average change in wages. Worker-based statistics, on the other side, show that relative changes in individual wages follow the business cycle, although different parts of the distribution react in a different way to it, the upper tail having a higher responsiveness. Both facts are at odds with the often reported rigidity of Italian wages. Indeed, the detected flexibility is mainly driven by movers and short tenure workers. The cross-country comparison suggests that the relatively high degree of wage compression in Italy could be associated with higher entry and exit rates.

Suggested Citation

Contini, Bruno and Leombruni, Roberto and Pacelli, Lia and Villosio, Claudia, Wage Mobility and Dynamics in Italy in the 90&Apos;S (April 2007). NBER Working Paper No. w13029, Available at SSRN: https://ssrn.com/abstract=979934

Bruno Contini (Contact Author)

University of Turin, Collegio Carlo Alberto, LABORatorio R. Revelli, Centre for Employment Studies, IZA ( email )

Collegio Carlo Alberto Via Real Collegio
Moncalieri, Turin - Piedmont 10024
Italy
+39 011 840314 (Phone)
+39 011 6702762 (Fax)

IZA Institute of Labor Economics

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

Roberto Leombruni

LABORatorio R. Revelli - Centre for Employment Studies ( email )

Via Real Collegio 30
10024 Moncalieri
Italy

Lia Pacelli

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

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy
+39 011 670 6038 (Phone)
+39 011 670 6062 (Fax)

HOME PAGE: http://www.labor-torino.it/english/people/cv_pacelli.htm

LABORatorio R. Revelli, Centre for Employment Studies

Via Real Collegio 30
10024 Moncalieri
Italy

Claudia Villosio

LABORatorio R. Revelli, Centre for Employment Studies ( email )

Via Real Collegio 30
10024 Moncalieri
Italy
+39 011.670.50.63 (Phone)
+ 39 011 6705061 (Fax)

R&P Ricerche e Progetti ( email )

Via Bava 8
Torino 10124
Italy
011-888100 (Phone)

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