Fixed Exchange-Rate Policy and Real Wage Growth: Quasi-Experimental Evidence

Corrado Andini

No 8701, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using Difference-in-Differences estimation and data from the European Community Household Panel, this paper suggests that the fixed exchange-rate policy adopted by Italy in the 1997-2000 period has reduced the real hourly wage growth of Italian full-time workers with permanent contracts, on average, by 3%. Yet, the cost of the policy has been ultimately paid by the private sector where real wage growth has decreased by 5.4%.

Keywords: difference-in-differences; productivity; wages (search for similar items in EconPapers)
JEL-codes: C23 J31 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2014-12
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Published - revised version published in: International Economics, 2023, 175 (C), 158-170

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