Wage Equalization and Regional Misallocation: Evidence from Italian and German Provinces / Tito Boeri, Andrea Ichino, Enrico Moretti, Johanna Posch.

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Boeri, Tito

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w25612.Publication details: Cambridge, Mass. National Bureau of Economic Research 2019.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Italy and Germany have similar geographical differences in productivity - North more productive than South in Italy; West more productive than East in Germany - but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local wage adjustments, while Germany has moved toward a more flexible system that allows for local bargaining. The Italian system has significant costs in terms of forgone aggregate earnings and employment because it generates a spatial equilibrium where workers queue for jobs in the South and remain unemployed while waiting. Our findings are relevant for other European countries.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w25612 (Browse shelf(Opens below))	Not For Loan

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February 2019.

Italy and Germany have similar geographical differences in productivity - North more productive than South in Italy; West more productive than East in Germany - but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local wage adjustments, while Germany has moved toward a more flexible system that allows for local bargaining. The Italian system has significant costs in terms of forgone aggregate earnings and employment because it generates a spatial equilibrium where workers queue for jobs in the South and remain unemployed while waiting. Our findings are relevant for other European countries.