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Business and Economics > Finance: General

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Wage Level and Structure; Wage Differentials x
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Cover IMF Working Papers
Competitiveness and Wage Bargaining Reform in Italy
Mr. Alvar Kangur
The growth of Italian exports has lagged that of euro area peers. Against the backdrop of unit labor costs that have risen faster than those in euro area peers, this paper examines whether there is a competitiveness challenge in Italy and evaluates the framework of wage bargaining. Wages are set at the sectoral level and extended nationally. However, they do not respond well to firm-specific productivity, regional disparities, or skill mismatches. Nominally rigid wages have also implied adjustment through lower profits and employment. Wage developments explain about 45 percent of the manufacturing unit labor cost gap with Germany. In a search-and-match DSGE model of the Italian labor market, this paper finds substantial gains from moving from sectoral- to firm-level wage setting of at least 3.5 percentage points lower unemployment (or higher employment) rate and a notable improvement in Italy’s competitiveness over the medium term.
Keywords:
WP; labor market; productivity differential; export price; wage bargaining; zombie firm; Italy; competitiveness; exchange rate; labor costs; exports; labor market reforms; search and matching; DSGE models; wage-productivity differential; wage dispersion; wage distribution; wage externality; real value; wage markup; negotiated wage limit; institutions in Italy; market share; frontier firm TFP level; sectoral wage agreement; wage agreement; Wages; Productivity; Labor markets; Competition; Global; Europe
Cover IMF Working Papers
Assessing Competitiveness Using Industry Unit Labor Costs: An Application to Slovakia
International Monetary Fund
Conceptual ambiguities and statistical weaknesses hamper the assessment of external competitiveness. The term competitiveness, while applied extensively, is often imprecisely defined, which can result in analytical errors and mistaken policy advice. Furthermore, aggregate statistical measures of competitiveness in terms of exchange rate misalignment can be biased. To address these issues, this paper makes two contributions. First, it clarifies the external competitiveness concept, highlighting the dichotomy between productivity-driven long-run growth and short-run deviations from the underlying growth trajectory, which can be related to exchange rate misalignment. Second, it develops a disaggregated statistical approach for examining competitiveness based on unit labor costs at the three digit industry level in a group of comparable countries. The case of Slovakia is used to illustrate these concepts, but the analytical insights have general application.
Keywords:
WP; Slovakia; cost; export share; competitiveness; unit labor cost; exchange rate; price level; paper estimates unit labor cost norm; disaggregated ULC; ULC dev.; industry unit labor cost; ULC relative; Competition; Exchange rates; Productivity; Global competitiveness; Export performance; Global