Job Market Paper

Wage Setting and School Enrollment: The Influence of Collective Agreements on Human Capital Accumulation in Italy, 1960s-1980s (click to download)

Do wage-setting institutions influence human capital accumulation? This paper studies the impact of collective wage bargaining on school enrollment exploiting a quasi-natural historical experiment from Italy around 1969, when labour unions coordinated to bargain steep wage raises. Italy’s weakly-selective educational system—whereby high-school students choose between specialist curricula at age fourteen—allows to separately identify the impact on enrollment rates from the substitution effect between alternative school tracks. Absent microdata for the period under study, I present original estimates of education and labour-market variables for ninety-two provinces with annual frequency between 1962 and 1982. Using an instrumental variable approach and flexible Difference-in-Differences with a continuous treatment variable, I find that the wage hike was associated with a temporary increase in early school leaving and a permanent substitution away from vocational schools preparing for manufacturing jobs. The length of the adjustment is found to explain a significant long-term loss in Italy’s potential human capital stock.

Working Papers

Collective Bargaining and Internal Migration: The Effect of Regional Wage Equalization in Italy after 1969 (draft available upon request)

High rates of internal migration were characteristic of the Italian economy from the 1950s through the 1960s, but they dropped suddenly in the early 1970s and have remained at relatively low levels since then, despite a contemporaneous increase in income and unemployment differentials between regions. This puzzling evolution has attracted research ever since, but a consensus on its causes is yet to be reached. This paper provides the first historical test for one prominent hypothesis, that the drop in internal migration was provoked by the spatial equalization of nominal wages set by collective bargaining, in 1972. I test this hypothesis using an original dataset of binary migration flows, contractual and effective wages, local price differentials and unemployment, which I have digitized from a range of printed primary sources, with annual frequency from 1961 to 1981. The paper presents an augmented gravity model of internal migration showing that spatial differentials in nominal minimum wages were a strong pull factors for both short- and long-distance migration through the 1960s, but not afterwards. Discussing potential mechanism, the paper shows that the decrease in internal migration during the 1970s was associated with the inception of the spatial mismatches that characterize Italy’s labour market to this day. (Manuscript available upon request: a.ramazzotti@lse.ac.uk)

Reacting to Egalitarianism: Collective Bargaining, Technology, and Organizational Change in Italy after 1969

The article explores the impact of an egalitarian wage push across the manufacturing sector on technological and organisational change in Italy during the 1970s. Reconstructing new wage series for a comprehensive range of industries, the article estimates that, between 1969 and 1980, the skill premium for blue-collar workers decreased on average by over 50\%, which was driven by collective agreements at the industry level. To identify the reaction both within firms and at the aggregate level, I digitize and combine balance sheet information and census data at different levels of spatial disaggregation. Using an instrumental variable approach, the article finds that the compression of wage differentials was associated with a 68% increase in the capital-labour ratio, and it explains 30% of the reduction in the share of blue-collar workers employed and up to 80% of the increase in subcontractors between 1968 and 1984. Spatial variation in the compression of wage differentials identifies larger effects on proxies of factor substitution at the aggregate level, which is associated with the proliferation of small establishments (under fifty employees) and a reduction of average establishment size. Together, these results suggest a concentration of industrial employment in smaller establishments and a general substitution of labour-intensive technologies with capital-intensive ones. (Manuscript available upon request: a.ramazzotti@lse.ac.uk)


Work in progress

Internal migrations, economic development and local labour markets in Italy. With Paolo Croce and Paolo Piselli (Bank of Italy). Work in progress.

Policy Models for Industrial Development. A New Sectoral and Geographical Analysis of the Cassa per il Mezzogiorno’s Incentives to Southern Italy’s Enterprises (1957-1993). With Amedeo Lepore (Uni Campania Vanvitelli) and Stefano Palermo (Uni Pegaso). Reject and Resubmit Business History

Predoctoral publications

A. Ramazzotti, Il lento avvicinamento. Popolazione, territori e ferrovia in Italia dal 1861, Soveria Mannelli: Rubbettino, 2021. Monograph version of the MPhil dissertation at the University of Oxford

A. Lepore, S. Palermo, A. Ramazzotti, ‘Il contributo della Cassa allo sviluppo industriale del Mezzogiorno. La ripartizione settoriale e territoriale degli interventi (1957-1993)’, Rivista Giuridica del Mezzogiorno, 2-3/2021, pp. 521-555. Article from a larger project detailing the geographical and sectoral allocation of subsidies for industrial development in Southern Italy from 1957 to 1993. The paper presents results from a sectoral reclassification of over 120,000 subsidies paid to 30,000 firms using a matching algorithm and a dictionary of terms describing 19 industries.

S. Palermo, A. Pomella and A. Ramazzotti, “La dinamica della grande impresa tra la fine dell’intervento straordinario e la nuova globalizzazione” in G. Coco and C. De Vincenti (eds.), La questione meridionale oggi, Bologna: il Mulino, 2020. The chapter studies the evolution and localisation of large industrial plants in Southern Italy from the 1980s to the 2000s, distinguishing between local firms and external direct investment, using a quantitative analysis of census data.

F. Pirro and A. Ramazzotti, ‘La persistenza della grande impresa nell’Italia meridionale. Dalla crisi del modello fordista alle nuove politiche industriali’ in Il risveglio del Mezzogiorno. Nuove politiche per lo sviluppo, edited by A. Lepore and G. Coco, Roma-Bari: Laterza, 2018. The chapter studies the evolution and localisation of large industrial plants in Southern Italy from the 1950s to the 1980s combining quantitative census data and case studies.

A. Ramazzotti, ‘La Cassa per il Mezzogiorno e il miglioramento fondiario attraverso l’esame degli interventi sulle fonti elettroniche e primi risultati di un’analisi empirica’, Rivista Economica del Mezzogiorno, 4/2017, pp. 1037-1068. The chapter studies the evolution and localisation of large industrial plants in Southern Italy from the 1950s to the 1980s combining quantitative census data and case studies.

Other pre-doctoral research

Accounting for the Market of Arts. Caravaggio, Luca Giordano, the Pio Monte della Misericordia and Arts Patronage in Naples during the 17th Century. Joint project with Amedeo Lepore and Stefano Palermo. Status: Revise and Resubmit Accounting History Review