Bernardo Fanfani (University of Torino)

 “The effects of collective bargaining on employment and growth”

Abstract

This paper analyses the employment effects of the Italian sectoral wage bargaining system. The study is based on high-frequency, comprehensive and updated information on employment and wages derived from administrative data on private-sector social security contributions, matched with precise information on the economic content of national industry-wide agreements bargained by trade unions’ and employers’ representatives. Results show an overall negative effect of the growth in contractual wages on several measures of employment, but they also point out the presence of significant heterogeneities in this effect across industries and demographic groups. More detailed firm-level analyses allow us to uncover how heterogeneous reactions to this policy interact with employment and revenues growth, as well as with the dynamics of labour productivity and investments in physical capital.