Bernardo Fanfani (University of Turin, ESOMAS Department)

Contractual Minimum Wages and Collective Bargaining: Italian Evidence from Forty Years of Data

Abstract: This paper documents the evolution of minimum wages bargained in Italian private-sector collective contracts over a forty-years period (1983-2023). Minimum wages are quite coordinated across sectors. They have grown in real levels over the last two-three decades, particularly among high skilled occupations, but this growth has been partially eroded by the 2022-2023 inflation crisis. Minimum wage growth is strongly correlated with past inflation, only weakly correlated with sectoral productivity growth, and unaffected by unemployment dynamics. Increasing differences between high- and low-skilled occupation minimum wages can explain around one third of the overall growth in the inequality of full-time equivalent daily wages that has occurred in Italy during the 1990s.