Bank of Italy workshop examines how firms and labor policies shape wages, employment and worker well-being

The Bank of Italy hosted a workshop with the Centre for Economic Policy Research examining how workers and firms respond to economic shocks and institutional changes, and how labor market policies affect employment, earnings and well-being. Research covered wage setting, firms’ labor market power, employment protection, job displacement, migration, workplace inequalities and productivity. Keynote research presented by University of Chicago professor Erik Hurst found that firms’ norms for nominal wage increases adjusted only modestly during the recent U.S. inflationary episode, leaving many workers with persistent real wage losses. University of Oxford professor Barbara Petrongolo presented evidence from Denmark that employment has substantial positive effects on mental health and that differences between workplaces directly affect employee well-being.