Physics

Mathematics

Optics

Geodesy

Labour economics

Mathematical analysis

Economics

Geography

Dispersion (optics)

Collective bargaining

Wage

Wage dispersion

Pace

Inequality

Efficiency wage

Wage bargaining

Wage inequality

British Journal of Industrial Relations

Italian male wage inequality has increased at a relatively fast pace from the mid‐1980s until the early 2000s, while it has been persistently flat since then. We analyse this trend, focusing on the period of most rapid growth in pay dispersion. By accounting for worker and firm fixed effects, it is shown that workers' heterogeneity has been a major determinant of increased wage inequalities, while variability in firm wage policies has declined over time. We also show that the growth in pay dispersion has entirely occurred between livelli di inquadramento , that is, job titles defined by national industry‐wide collective bargaining institutions, for which specific minimum wages apply. We conclude that the underlying market forces determining wage inequality have been largely channelled into the tight tracks set by the centralized system of industrial relations.

Collective Bargaining and the Evolution of Wage Inequality in Italy