## Italy: Selected Issues

_IMF Staff Country Reports, July 27, 2017_

## Source details

**Canonical URL:** [Italy: Selected Issues](https://www.imf.org/en/publications/cr/issues/2017/07/27/italy-selected-issues-45140)

## Other formats

- [Markdown version](/en/publications/cr/issues/2017/07/27/italy-selected-issues-45140/index.md)
- [Structured JSON version](/en/publications/cr/issues/2017/07/27/italy-selected-issues-45140/index.json)
- [Bundle manifest](/en/publications/cr/issues/2017/07/27/italy-selected-issues-45140/bundle-manifest.json)

## Bibliographic details
- Published: July 27, 2017
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484312568.002

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### Competitiveness and wage bargaining reform — core analysis
- The paper analyzes competitiveness and wage bargaining reform in Italy.
- Growth of Italian exports has lagged that of euro area peers.
- Wages are set at the sectoral level and extended nationally.
- Sectoral wage setting does not respond well to:
  - firm-specific productivity,
  - regional disparities,
  - skill mismatches.
- Nominally rigid wages have implied adjustment through:
  - lower profits,
  - lower employment.

### Quantified impacts and simulation results
- Moving from sectoral- to firm-level wage setting yields substantial gains of at least 3.5 percentage points.
- Reform would lead to lower unemployment (or higher employment) rate.
- Reform would produce a notable improvement in Italy’s competitiveness over the medium term.

### Policy implications and recommendations (as inferred from analysis)
- Shift wage bargaining from sectoral to firm-level to better align wages with firm-specific productivity, regional conditions, and skill composition.
- Address nominal wage rigidities to reduce adjustment via profit and employment losses.
- Implement reforms that enhance export competitiveness given lagging export growth relative to euro area peers.

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## Content in this bundle

- **Country Report**
  - [Country Report (Markdown version)](/-/media/files/publications/cr/2017/cr17238.pdf.md){rel="alternate" type="text/markdown"}
  - [Country Report (PDF)](/-/media/files/publications/cr/2017/cr17238.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2017/07/27/italy-selected-issues-45140_