Italy: Selected Issues

Publication Date:

July 27, 2017

Electronic Access:

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Summary:

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.

Series:

Country Report No. 2017/238

Subject:

English

Publication Date:

July 27, 2017

ISBN/ISSN:

9781484312568/1934-7685

Stock No:

1ITAEA2017002

Pages:

80

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