Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203098
Authors: 
Matano, Alessia
Naticchioni, Paolo
Vona, Francesco
Year of Publication: 
2019
Series/Report no.: 
LEM Working Paper Series 2019/08
Abstract: 
A growing body of research has contributed to understanding the labor market and political effects of globalization. This paper explores an overlooked aspect of trade-induced adjustments in the labor market: the institutional aspect. We take advantage of the two-tier collective bargaining structure of the Italian labor market, whereby the first tier entails setting minimum wages at the 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 increased with the increase in the share of unskilled workers employed in the contract. This negative institutional effect contrasts with a nonsignificant effect of trade on total wages, with the latter becoming positive and large only for highly skilled workers.
Subjects: 
Bargained minimum wages
import competition
labor market institutions
skills
JEL: 
J50
F16
J31
J24
Document Type: 
Working Paper
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