A growing body of research has contributed to understanding the labour market and political effects of globalization. This article explores an overlooked feature of trade-induced adjustments in the labour market: the institutional aspect. We take advantage of the Italian collectively bargained minimum wage system, which is based on a two-tier structure, whereby the first tier entails setting minimum wages at the national contract level. Using an instrumental variable strategy and exploiting variations in contract-level exposure to trade, we find for the 1995-2003 period that, on average, the surge in imports decreased contractual minimum wages by 1.5%. This impact increases in the share of unskilled workers employed in the contract. This negative institutional effect contrasts with a non-significant effect of trade on total wages, with the latter becoming positive and large only for highly skilled workers.

The Institutional Wage Adjustment to Import Competition: Evidence from the Italian Collective Bargaining system / A. Matano, P. Naticchioni, F. Vona. - In: OXFORD ECONOMIC PAPERS. - ISSN 1464-3812. - (2022), pp. gpac033.1-gpac033.24. [Epub ahead of print] [10.1093/oep/gpac033]

The Institutional Wage Adjustment to Import Competition: Evidence from the Italian Collective Bargaining system

F. Vona
Ultimo
2022

Abstract

A growing body of research has contributed to understanding the labour market and political effects of globalization. This article explores an overlooked feature of trade-induced adjustments in the labour market: the institutional aspect. We take advantage of the Italian collectively bargained minimum wage system, which is based on a two-tier structure, whereby the first tier entails setting minimum wages at the national contract level. Using an instrumental variable strategy and exploiting variations in contract-level exposure to trade, we find for the 1995-2003 period that, on average, the surge in imports decreased contractual minimum wages by 1.5%. This impact increases in the share of unskilled workers employed in the contract. This negative institutional effect contrasts with a non-significant effect of trade on total wages, with the latter becoming positive and large only for highly skilled workers.
J50; F16; J31; J24;
Settore SECS-P/01 - Economia Politica
30-lug-2022
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/945286
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