Labour Market Power and the Quest for an Optimal Minimum Wage: Evidence from Italy

Mauro Caselli, Jasmine Mondolo and Stefano Schiavo

No 70, EconPol Working Paper from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: This study investigates the recent trends in labour market power in Italy and assess-es 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 the own-ers to the 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 em-ployees or even by exiting the market. Finally, we defined that an optimal minimum wage, which minimises the negative effect and maximises the positive effect for the economy, ranges between 8.25 and 9.65 euro per hour.

Date: 2021
New Economics Papers: this item is included in nep-com, nep-eec and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/EconPol_Working_Paper_70_MinimumWage-Italy_EU.pdf (application/pdf)

Related works:
Journal Article: Labour market power and the quest for an optimal minimum wage: evidence from Italy (2023)
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:ces:econwp:_70

Access Statistics for this paper

More papers in EconPol Working Paper from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().