Roberto Gabriele

MATCHING, BARGAINING, AND WAGE SETTING IN AN EVOLUTIONARY MODEL OF LABOR MARKET AND OUTPUT DYNAMICS

In this paper, we present an agent-based, evolutionary, model of output- and labor-market dynamics. Firms produce a homogeneous, perishable good under constant returns to scale using labor only. Labor productivities are firm-specific and change stochastically due to technical progress. The key feature of the model resides in an explicit microfoundation of the processes of : (i) matching between firms and workers, (ii) job search, (iii) wage setting, (iv) endogenous formation of aggregate demand, and (v) endogenous price formation. Moreover, we allow for a competitive process entailing selection of firms on the basis of their revealed competitiveness. Simulations show that the model is able to robustly reproduce Beveridge, Wage and Okun curves under quite broad behavioral and institutional settings. The system generates endogenously an Okun coefficient greater than one even if individual firms employ production functions exhibiting constant returns to labor. Monte Carlo simulations also indicate that statistically detectable shifts in Okun and Beveridge curves emerge as the result of changes in institutional, behavioral, and technological parameters. Finally, the model generates sharp predictions about how system parameters affect aggregate performance (i.e. average GDP growth) and its volatility.

Towards an evolutionary interpretation of aggregate labor market regularities

In this paper, we present an agent-based, evolutionary, model of output- and labor-market dynamics. Firms produce a homogeneous, perishable, good under constant returns to scale using labor only. Workers are skill-homogeneous and buy the good spending all their wage. Labor productivities are firm-specific and change stochastically due to technical progress. Both firms and workers hold wage expectations which are adaptively revised on the base of observed market dynamics. A key feature of the model is an explicit microfoundation of the processes of: (i) matching between firms and workers; (ii) worker search; (iii) wage setting; (iv) endogenous formation of aggregate demand; (v) endogenous price formation. We also allow for selection of firms on the basis of their revealed competitiveness. Montecarlo simulations show that the model is able to jointly reproduce Beveridge, Wage and Okuns curves under quite broad behavioral and institutional settings. The system generates endogenously Okuns coefficients greater than one even if individual firms employ constant returns to labor technologies. Simulations also indicate that statistically detectable shifts in Okuns and Beveridge curves emerge as the result of changes in institutional, behavioral, and technological parameters. Finally, the model generates sharp predictions about how system parameters affect aggregate performance and its volatility

Assessing the Economic Impact of Public Industrial Policies: An Empirical Investigation on Subsidies

Empirical literature findings do not provide a clear-cut interpretation of the effects of public aid on firms’ performances. We contribute to this literature analysing the effects of public regional subsidies on investment using a new dataset covering all the firms in the Italian province of Trento, along with a record of public aid granted in the last 15 years. We find permanent positive effects of aid on firms’ size, but no effect is found on factor substitution, nor on technical change. Moreover, subsidies do not improve either profitability or productivity. These results help better define the scope for local aid.

Crescita della produttività, progresso tecnico e impiego del lavoro nelle imprese manifatturiere italiane: 1996-2006

The article analyses the productivity dynamics of a sample of Italian manufacturing firms in the period 1996-2006. The first part computes Malmquist measures of productivity using non parametric techniques. Our measures show that the low rate of growth in productivity is due to the different models used to adapt to the changes in the competitive environment. Up to 2000, all the firms attempted to improve efficiency, whereas technical progress is absent. After 2000, there is evidence that a group of firms advance the technical frontier, while many firms lag behind and increase the frontier gap. The second part of the article correlates the observed measures of productivity to some characteristics of the employed labor. The hypothesis that productive performances could be put in relation to the two tiers of the labor markets resulting from the reforms adopted at the end of the century is supported. Highly productive firms use a higher share of skilled labor and fewer part-time workers. The reverse is true for less efficient firms. Jel classification:

Contesto regionale, struttura economica e impatto delle politiche regionali: il caso degli alberghi in Trentino

Il lavoro propone un metodo di valutazione delle politiche regionali che tiene conto dell’effetto delle esternalita generate, dati il contesto e la distribuzione delle imprese sul territorio. L’analisi riguarda la Legge Provinciale 6/99 in Trentino e mira a stabilire se i sussidi agli alberghi nelle diverse destinazioni turistiche hanno avuto un effetto positivo sul livello attivita degli alberghi e un effetto positivo sull’economia locale. I risultati mostrano un effetto diretto positivo dei sussidi sul grado e variabilita dell’utilizzo degli alberghi. L’effetto dell’esternalita e invece in generale negativo: funziona come un moderatore tra l’impulso della politica e il suo effetto finale.

Il ruolo della dimensione e dell’età nella crescita occupazionale delle PMI italiane

The paper empirically investigates gross job flows and the growth patterns of limited liability companies in Italy in 1996-2004, using original data on workforces and other company traits. The analysis shows that the phenomenon of regression to the mean only partially explains the tendency of small firms to grow at a faster pace than large organizations. The analysis of gross job flow indicates that the extent of job creation and job destruction shrunk in the aftermath of the economic downturn in 2001 and that the labour market was less efficient in allocating job opportunities. The econometric analysis shows that size has a negative impact on the net employment growth of a company, even though the negative correlation disappears among units with more than twenty-four employees. Firms with a history of maximum fourteen years outperform the average firm in the sample, while, conversely, the growth of companies is not influenced by their age if these have been in business for fifteen years or more, in fact it can even be a burden among the oldest firms in the sample.

Local Authority Policies: The Case of Trentino (Le Politiche Promosse Dagli Enti Locali: Il Caso Del Trentino)

Empirical literature findings do not provide a clear-cut interpretation of the effects of public aid on performances of firms. We contribute to this literature analysing the effects of public regional financial subsidies on investment using a unique dataset covering all the firms in the Italian province of Trentino with a record of public aid granted to them in the last 15 years. We find a temporary effect on investment level together with a permanent positive effects on size of firms, but no effect is found on factors substitution nor on technical change. Moreover, subsidies do not improve either profitability or productivity. These results help better define the scope of local aid.

The Effects of Public Aid to Private Investments on Firm Performance: The Case of Trentino

We examine the effects of local public policies aimed at stimulating the private sector by means of subsidies. Our goal is that of understanding. the level of coherence between publicly stated goals of the regional policy-maker, the actual shape of the subsidies, and their effects at firm level. The relevance of this goal stems from two considerations. First, the design of public policies aiming at stimulating private entrepreneurial activity is a central issue in the literature, but empirical findings do not provide a clear cut interpretation of their impact. Second, in Italy, local industrial policies have been growing in importance in recent years. In order to address these problems, the analysis uses a new dataset including the whole population of firms in the Italian province of Trentino and detailing the effects of the two main regional laws regulating subsidies of the last 15 years. At a methodological level, we use the propensity score matching approach in order to disentangle the effects of policies on firms productivity, profitability, and growth. Results show that aid policies, in general, have the ability to modify entrepreneurial decision-making about investments. From a policy perspective, local public aid seems to be able to foster growth, however this does not translate into a better economic performance. Moreover, from the comparison of the two laws we can conclude that policy design matters: results are more significant whenever goals are clearly incorporated into the provisions of the law, especially when linked to a sound model for the expected outcomes.