The distribution of employees and wages in five sectors of activity: the Italian case

Abstract

Considering the long stagnation of Italian wages, and taking into consideration the current inflation growth, in this report we highlight the role of the Italian wage setting model in the dynamic of both employment and wages considering also the sectoral heterogeneity characterising the Italian labor market. Indeed, wage-setting institutions are important for explaining the differences in economic performance and the provisions characterizing collective or decentralized wage bargaining can influence several economic variables. Italy is characterized by a two-tier industrial relations system where the sectoral collective bargaining covers about 90% of workers, while company-level bargaining affects only a minority of Italian firms. This kind of system can affect both on wages and employment. In the following pages, using the data on private-sector employees deriving from the Istituto Nazionale di Statistica (Istat), we will provide some important evidence.

Keywords: Collective bargaining, wages, employment, Italy, sector of activities

Acknowledgments: This report reflects the views of the authors only; the European Commission or any other funding agency or consortium partner cannot be held responsible for any use that may be made of the information contained therein. This report is the result of an agreement signed by the author with Fondazione Di Vittorio (FDV). The views and opinions expressed in this report are those of the author and do not necessarily reflect the views or positions of Inapp.