Firm strategies and distributional dynamics: labour share in Italian medium-large firms

Abstract

Using an original database on medium and large Italian firms built by merging the Rilevazione Imprese e Lavoro run by INAPP in 2010 and 2015 with the AIDA archive by Bureau Van Dijk, we show that the trend of the labour share differs along the labour share distribution. We carry out Unconditional Quantile Regression decompositions to explore the main drivers behind this heterogeneity. Thus, we contribute to the literature on the dynamics of the labour share since we investigate phenomena which cannot be observed through a macro perspective or by looking at a single parameter of the labour share distribution. After including in our specifications several firm-level characteristics and considering composition effects, we find that outsourcing is the main factor which plays a role in reducing the labour share along the distribution. Further different mechanisms act in the various parts of the distribution: unionization contributes to increase the labour share at the top of the labour share distribution, while the introduction of some forms of product (process) innovations is associated with a negative (positive) change in the labour share for those firms at the bottom of the labour share distribution.

Peer interactions, local markets, and wages: Evidence from Italy

“…The Inapp-RIL survey collects a rich set of information about employment composition, personnel organization, industrial relations, and other workplace characteristics. For what concerns our purposes, the RIL questionnaire provides useful information about the firm-level presence of trade union representative bodies, allowing us to distinguish between the Rappresentanza Sindacale Aziendale (RSA) and Rappresentanza Sindacale Unitaria (RSU)8 . The RIL surveys also offer information on firm strategies (innovation and export), sales per employee, family ownership and management structure.…”