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Wages and Unemployment in Italy, a Long Term Perspective
Author(s) -
Zenezini Maurizio
Publication year - 1989
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.1989.tb00156.x
Subject(s) - unemployment , economics , wage , labour economics , argument (complex analysis) , perspective (graphical) , full employment , term (time) , efficiency wage , keynesian economics , macroeconomics , biochemistry , chemistry , physics , quantum mechanics , artificial intelligence , computer science
This paper traces a long‐term perspective of the relationship between wages and unemployment in the Italian economy from the end of the fifties to the mid‐eighties. During this period, the rate of unemployment exhibited three distinct time profiles. After a cyclical episode from around 1958 to the mid‐sixties, the unemployment rates changed very little for a decade, showing only mild fluctuations until 1975. Since then, unemployment has been increasing steadily, and in 1987 it exceeded 12|X% of the labour force. The aim of this paper is not to provide a new interpretation of facts, but rather to assess whether, and when, wage pressure has represented a significant factor in the evolution of unemployment. The main conclusion of the paper is that the considerable rise in unemployment observed since the mid‐70s is part of a long term evolution, and that in the long‐run wages are not exogenous. Though there have been periods of exogenous wage push temporarily affecting unemployment, the argument that the continuous rise in unemployment depends on inappropriate real wages has no empirical content.