Italy and Germany have similar geographical differences in productivity – North more productive than South in Italy …; West more productive than East in Germany – but have adopted different models of wage bargaining. Italy sets wages based on … nationwide contracts that allow for limited local wage adjustments, while Germany has moved toward a more flexible system that …

reduce inequality. We study the local and aggregate effects of collective bargaining in Italy and Germany. The two countries … West more productive than the East in Germany – but have adopted different models of wage bargaining. Italy sets wages … based on nationwide contracts that allow for limited local wage adjustments, while Germany has moved toward a more flexible …