Labour market frictions across worker types

Mauro Caselli (), Andrea Locatelli () and Stefano Schiavo ()
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Mauro Caselli: Università di Trento
Andrea Locatelli: Banca d’Italia
Stefano Schiavo: Università di Trento

Economia Politica: Journal of Analytical and Institutional Economics, 2025, vol. 42, issue 3, No 7, 799-827

Abstract: Abstract We analyze the patterns and evolution of labour market frictions in Italy over the period 2002–2019, distinguishing between white- and blue-collar workers. For both types of employees, we document a fall in the wedge between the marginal revenue product of labour (MRPL) and labour costs over the sample period. Such a decline hints to changes in the labour market that favour workers over firms. In the most recent years, the cost of blue-collar workers is about 10% above their MRPL, while white-collar workers’ are paid about 10% below their MRPL. We find significant heterogeneity across economic sectors and Italian regions, with higher labour wedges in the southern part of the country for both white- and blue-collar workers.

Keywords: Labour market power; Monopsony; Market imperfections (search for similar items in EconPapers)
JEL-codes: J23 J42 L13 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s40888-025-00376-z

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