Italy: Selected Issues
July 27, 2017
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This Selected Issues paper analyzes the competitiveness and wage bargaining reform in Italy. The growth of Italian exports has lagged that of euro area peers. Wages are set at the sectoral level and extended nationally. However, they do not respond well to firm-specific productivity, regional disparities, or skill mismatches. Nominally rigid wages have also implied adjustment through lower profits and employment. The analysis also suggests substantial gains from moving from sectoral- to firm-level wage setting of at least 3.5 percentage points, lower unemployment (or higher employment) rate and a notable improvement in Italy’s competitiveness over the medium term.
Subject: Expenditure, Labor, Pension spending, Pensions, Tax allowances, Taxes, Wages
Keywords: CR, dividend, Europe, GDP, GIMF simulation strategy, Global, IMF's Global Integrated Monetary and Fiscal, internal rate of return, ISCR, Italy, NPL ratio, Pension spending, Pensions, productivity differential, real GDP, reform package, structural surplus, Tax allowances, tax credit, wage bargaining, Wages
Pages:
80
Volume:
2017
DOI:
Issue:
238
Series:
Country Report No. 2017/238
Stock No:
1ITAEA2017002
ISBN:
9781484312568
ISSN:
1934-7685
