Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/225057 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 85
Publisher: 
Università Cattolica del Sacro Cuore, Dipartimento di Economia e Finanza (DISCE), Milano
Abstract: 
In this paper, we explore the relationship between non-compliance with bargained minimum wages and employment. We illustrate the role of labour courts with respect to the Constitutional provision of "fair" wage and sketch a model in which firms choose their desired levels of employment and non-compliance. We show that when employers internalize the expected costs of non-compliance, the effect of deviating from the bargained minimum wages on employment levels are modest, or null. Using data from the Italian LFS, we find evidence of a positive, but small, trade-off between non-compliance and employment. We discuss the policy implications of these findings for wage bargaining, also considering the costs that "turning a blind eye" to non-compliance implies for the Italian system of industrial relations.
Subjects: 
Collective bargaining
sectoral minimum wages
compliance
JEL: 
J08
J31
J52
J83
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.