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Labor Market Reform and Rent-sharing: A Quasi-experiment Experience

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  • Ambra Poggi
  • Rosella Nicolini

Abstract

We analyze the impact on wages of the adoption of a rent-sharing remuneration scheme aimed at making labor institutions more flexible. We work within a quasi-experimental setting referring to a sample of Italian companies before and after the introduction of the Treu Reform (1997). Our estimations confirm that this reform not only increased insider workers' wages via rent-sharing, but also fueled a σ−convergence process of the rent-sharing elasticity across the sectors at a different rate. Finally, we deliver a reasoned discussion of the consequences of implementing this reform on the Italian job market. This reform produced advances in the quality of job remuneration but it deepened a structural gap in the Italian labor market composition.

Suggested Citation

  • Ambra Poggi & Rosella Nicolini, 2016. "Labor Market Reform and Rent-sharing: A Quasi-experiment Experience," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(4), pages 618-631.
    • Handle: RePEc:oup:apecpp:v:38:y:2016:i:4:p:618-631.
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    File URL: http://hdl.handle.net/10.1093/aepp/ppv026
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    References listed on IDEAS

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    1. Alessia Matano & Paolo Naticchioni, 2011. "Is There Rent Sharing in Italy? Evidence from Employer-Employee Data," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 265-279, December.
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    5. David Margolis & Kjell G. Salvanes, 2000. "Do Firms Really Share Rents with Their Employees?," Post-Print halshs-00367838, HAL.
    6. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    7. Strozzi, Chiara & Pistoresi, Barbara, 2001. "Rent Sharing in Wage Determination: Evidence from Italy," CEPR Discussion Papers 2939, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Edinson Tolentino, 2022. "An evaluation of a mandatory profit-sharing reform in Peru, using quasi-experimental methods," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(2), pages 313-334, June.

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    More about this item

    Keywords

    Rent-sharing; convergence; IV estimation;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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