Labour market power and the quest for an optimal minimum wage: evidence from Italy

Mauro Caselli, Jasmine Mondolo and Stefano Schiavo

Applied Economics, 2023, vol. 55, issue 15, 1713-1727

Abstract: This study investigates the recent trends in labour market power in Italy and assesses the impact of a potential minimum wage using a large sample of manufacturing firms. We show that, despite an average shift of labour market power from companies to workers, monopsony power is still widespread, especially in some sectors and regions. The introduction of a minimum wage would be beneficial to workers and the economy as it reduces the monopsony power of highly productive firms paying low wages; however, it may also have a negative impact, since firms with low wages and low labour productivity may react by reducing the number of their employees or even by exiting the market. Finally, we find that an optimal minimum wage, which minimizes the negative effect and maximizes the positive effect for the economy, ranges between 8.25 and 9.65 euro per hour.

Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2022.2099523 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Labour Market Power and the Quest for an Optimal Minimum Wage: Evidence from Italy (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:55:y:2023:i:15:p:1713-1727

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2022.2099523

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().