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Labor Market Reform and Rent‐sharing: A Quasi‐experiment Experience
Author(s) -
Poggi Ambra,
Nicolini Rosella
Publication year - 2016
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/ppv026
Subject(s) - remuneration , insider , labour economics , economics , sample (material) , rent seeking , work (physics) , finance , mechanical engineering , chemistry , law , engineering , chromatography , politics , political science
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.