National collective agreements governing Italy’s salaries are fostering inequalities in terms of purchasing power and benefiting workers from the South. Thus are the conclusions of a study presented on 03 June at the Festival of the Economy in Trento and undertaken by three economists, Tito Boeri from the University of Bocconi (and current President of the INPS (National Institute of Social Insurance), Andrea Ichina from the European University Institute of Florence, and Enrico Moretti from Berkeley University.
The study ‘Negotiations and territorial differences: when equal becomes unequal’ compares various data including salary levels, productivity, and accommodation costs. Productivity levels are higher in the North of the country yet nominal wages cannot take this into account since they are set by national sector wide collective agreements.
Slightly lower nominal wages are a feature in Southern Italy but real wages are significantly higher and especially because accommodation costs are much lower in the South of the country.
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