Real Wages in Italy 1970-2000: Elements for an interpretation

The purpose of the paper is to attempt an interpretation of the wage trends in Italy in 1970-2000. The empirical analysis moves from a classical standpoint, looking at the influence of labour market conditions, the degree of workers' organisation, and broader economic and institutional factors on wage trends. We find that industry is the leading sector in wage determination and that real wages in this sector have a strong negative correlation with the unemployment level. By contrast, no systematic correlation appears between productivity growth on the one hand and wages or earnings on the other, either in industry or in the business sector as a whole. The relationship between real wages and unemployment udergoes changes that appear associated to broader changes in the institutional/economic framework