How did the governance institutions of labour market affect the Italian productivity and economic growth during 1990s and 2000s. An explanation of the labour productivity slowdown

In the last decades a decrease in labour productivity and a wage compression have been registered in Italy as well as in many other European countries. The aim of this paper is to analyze the relations between this productivity slowdown and the governance institutions of labour market. The hypothesis of a negative relation between wage compression and productivity growth is backed by different theoretical positions. The paper tries to understand the reasons of the productivity slowdown after 1993, through a model of structural equations and simulations of different economic scenarios of the Italian economy.