An offer you can't refuse: wage rigidities in the Northern Italian labour market

Cappabianca, Rafael; Fisch, Daniel; Hofflin, Abel; Marti, Nicolas; Ruffert, Anna

An offer you can't refuse: wage rigidities in the Northern Italian labour market

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Cappabianca, R, Fisch, D, Hofflin, A, Marti, N, Ruffert, A. An offer you can't refuse: wage rigidities in the Northern Italian labour market. 2024. handle: http://hdl.handle.net/10230/68457

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Abstract

This paper investigates real wage rigidity, particularly for the wages paid to new hires (NH) in the Veneto Worker History dataset from 1975 to 2001 in Italy. We offer novel estimates of NH wage rigidity at the job level, controlling for composition effects. Our findings reveal significant real wage rigidity among NH, especially along the bunching margin and for low-income workers, and provide evidence that continuing worker (CW) wages are instead more rigid along the employment margin. Additionally, NH wages exhibit weak cyclicality with unemployment. These insights are connected to a simple Diamond-Mortensen-Pissarides search-and-matching model, extended with rigidities.
Aquest treball investiga la rigidesa salarial real, particularment dels nous contractats (NH) a la base de dades Veneto Worker History del 1975 al 2001 a Itàlia. Oferim noves estimacions de les rigideses salarials dels NH a nivell laboral, controlant efectes de composició. Descobrim rigideses salarials significatives per als NH, especialment als marges d'agrupament i per als treballadors de baixos ingressos, i evidenciem que els salaris dels treballadors continuats (CW) són més rígids al marge d'ocupació. Addicionalment, els salaris dels NH mostren ciclicitat dèbil amb l'atur. Connectem aquesta anàlisi al model Diamond-Mortensen-Pissarides de cerca-i-coincidència, ampliat amb rigideses.